Qualifying for a credit score: It's not a guarantee

04.28.09
By John Ulzheimer

There is much debate and controversy when it comes to credit scores. Are credit scores fair? Are they to blame for the credit crunch? Do they take into account the current economic realities? All of these are great questions that can be discussed until we're blue in the face. But how about this little gem of a conundrum: Why don't we all have credit scores?

It’s not-so-common knowledge that we have to actually qualify for a credit score. This means our credit reports have to meet certain minimum requirements in order for them to be deemed as “scoreable” and only then will they actually have the ubiquitous three-digit number calculated.  

Since FICO is still the dominant credit score used by the vast majority of lenders for the vast majority of credit-related transactions, we’ll focus there once again. FICO has two suites of credit bureau-based, risk-scoring models, each with a variety of credit score products. We’ll investigate this scoring criteria for each:

The Classic FICO® Score – This is the one that we’re all familiar with.  This suite of models is where we’ll find BEACON (Equifax), The FICO Risk Score Classic (TransUnion), and The Experian Fair Isaac Score (Experian). In addition to these models we’ll also find all of the industry-adjusted versions of these scores, including the auto adjusted score, the bankcard adjusted score, the installment loan adjusted score, the personal finance adjusted score, and the newest of the FICO adjusted scores, the mortgage score. In order for your credit file from any of the credit reporting agencies to be scored using these above listed credit score models, it must meet these three requirements:

1. The credit file cannot have any deceased indicator: this ensures that a score is not issued for a credit report belonging to a deceased consumer. This is a fraud prevention safeguard.
2. The credit file must contain at least one tradeline that has been UPDATED within the past six months (this is determined by the “date reported” field on the credit report).
3. The credit file must contain at least one tradeline that has been OPENED for at least six months (this is determined by the “date opened” field on the credit report).

One tradeline can satisfy numbers two and three above. So, if I have a Capital One credit card that I opened five years ago that just updated last month, I’ll qualify for a score assuming I’m not deceased.  

The NextGen FICO Score – These scores are more powerful than the Classic scores but are used by fewer lenders. There are three models in this suite. They are PINNACLE (Equifax), PRECISION (TransUnion), and the Experian Fair Isaac Advanced Risk Score (Experian). In order for your credit file from any of the credit reporting agencies to be scored using these above listed credit score models, it must meet these three requirements:

1. The credit file cannot have any deceased indicator: this ensures that a score is not issued for a credit report belonging to a deceased consumer. This is a fraud prevention safeguard.
2. The credit file must contain at least one tradeline that has been UPDATED within the past twelve months (this is determined by the “date reported” field on the credit report).
3. The credit file must contain at least one tradeline that has been OPENED for at least three months (this is determined by the “date opened” field on the credit report).

And again, one tradeline can satisfy numbers two and three above. So, if I have a Citibank credit card that I opened five years ago that just updated last month, I’ll qualify for a score assuming I’m not deceased. 

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Credit reports have to meet certain minimum requirements in order for them to be deemed as scoreable.