Understanding your credit report shouldn’t be confusing. You would think that since they all use the same, standard format, credit reporting software system, that the scores would be the same.

But each credit bureau uses a different credit scoring model. Add to that the fact that not all creditors report your debt to all three credit reporting agencies and you have the recipe for confusion. On top of this information, you should be aware that the credit score you get is not the same one that is given to businesses.

Let me try to explain what’s going on.

You’ve heard of the term FICO score. The FICO score, named after the Fair Isaac Corporation, is determined by using information from all three major credit reporting bureaus. FICO has a scale of 300 to 850 and is the same score that is sold to businesses.

Think of your FICO score as the main house that contains all the other little credit scores. This is the one a business sees when it requests a credit score report. Each of the credit reporting bureaus have their own room in the main house. They get to fix that room up any way they want to.

Equifax wants to be just like FICO. In fact they are the only credit reporting bureau that sells the FICO score to consumers except they refer to it as BEACON.

At TransUnion, you get a personal credit score based on the FICO model and called Empirica. Their score ranges from 300 to 850.

Experian uses a their own consumer credit score based on the PLUS score system.  Their scores range from 330 to 830

Each of your creditors reports to the credit bureaus.  They may report to all of the credit bureaus or just one of the credit bureaus. They might report incorrect information or they might not report any information.
Each credit score is different and you have no control over how your credit score is determined. What you can control are the details of your credit history.

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There’s still time to put in your claim for the TransUnion Class Action settlement and receive six or nine month of free credit monitoring. All you have to do is log on and fill out the simple form by September 24, 2008. If you have any credit accounts at all, there is no reason why you shouldn’t be eligible. The class can include anyone who has held a credit card or other loan account at any point between January 1, 1987, and May 28 of this year.

With this free credit monitoring service, you will receive a free copy of your credit report – from the TransUnion bureau only of course – as many times as you request it for the length of time you are subscribed to the monitoring service. You can also get a free copy of your credit score under the same terms. The main difference between the six-month period and the nine-month period of monitoring service in regards to the settlement is that if you choose nine months of monitoring you will not receive a portion of the cash reward that is doled out when the case is resolved. (This amount is undisclosed at this time and will depend on the number of claimants.)

So what is the class action suit about? It’s in regards to a claim that TransUnion distributed information from Americans’ credit files for marketing purposes without their permission, which is prohibited under the Fair Credit Reporting Act. Note that TransUnion still maintains that it did not violate the Act.

All who file their claims by September 24 should most likely see their credit monitoring benefits available in the next couple months. As far as the cash reward, that may take up to two years or more to show up, so don’t add it to the budget for next week’s grocery bill.

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