Experian, credit, and FICO score are common terms in the credit world. All three indicate an individual’s credit history. But they seem confusing for most outside the finance industry. Below, we will discuss the difference between FICO score vs credit score vs Experian. Moreover, we will understand more about these scores and learn how to improve them.
Read on to better understand these terms and their meaning and significance, especially if you plan to apply for a Personal Loan and want the best offer.
Key Differences Between FICO Score, Credit Score and Experian Score
Since these are different credit scores, the most relevant depends on the credit type and lender you approach. Let’s look at the key differences between the FICO credit score and the Experian credit score:
| Parameter | FICO Score | Credit Score | Experian Score |
| Definition | Fair Isaac Corporation (FICO) assigns FICO scores, which represent creditworthiness based on data in the credit report. | A Credit Score is a numerical expression based on a level analysis of a person's credit files, representing their creditworthiness. | The Experian score in India is a credit rating provided by Experian to assess an individual's creditworthiness based on their credit history. |
| Origin | Fair Isaac Corporation created FICO scores in 1956 in Bozeman, Montana. | The concept of credit scores has evolved over time, with various credit bureaus and institutions developing their own scoring models. | Experian is a data analytics and consumer credit reporting company headquartered in Dublin, Ireland. |
| Relevance in India | FICO is more relevant in the US, Canada, and Mexico. Although it is available in India as well, its relevance is limited here due to insignificant credit card penetration. | Credit Scores are increasingly important in India for obtaining loans, credit cards, and other financial products, with a typical range between 300 and 900. | Experian, one of the major credit bureaus in India, assigns the score based on your credit behaviour between 300 to 900. |
How to Check Your Credit Scores?
- Now that you know what FICO and Experian score is, follow these steps to check yours online:
- Go to the website of the preferred credit bureau.
- Sign up by providing personal details like your name, date of birth, address, and PAN card number.
- Complete the identity verification process, which may include answering security questions or uploading documents.
- After verification, request your credit report and score.
- Access your credit score and report online, or download it for future reference.
How to Improve Your Credit Scores?
A high credit score helps you get the best loan deal at the best rates and terms and conditions. Here are some practical tips to improve your credit scores:
- Be disciplined with your loan EMI and credit card bill payments.
- Retain old credit cards to prolong your credit history and reduce your credit utilisation ratio.
- Request an increase in your credit limit to improve your credit utilisation ratio.
- Opt for a longer repayment tenure when borrowing a loan to make repayment manageable.
- Avoid borrowing unnecessarily.
- Check your credit report to identify errors and get them corrected immediately.
- Choose different forms of credit to diversify your credit portfolio.
Why does Credit Awareness Matter?
Understanding your credit score is crucial when navigating the financial landscape. Here are a few reasons why it matters:
- You can make informed financial decisions to achieve your goals with credit knowledge and active monitoring.
- When seeking a loan, you can plan your application appropriately.
- Knowing your credit score and achieving a decent level helps secure a loan easily at the best interest rates.
How Credit Scores Help You Apply for a Personal Loan?
Maintaining a decent credit score helps in various ways when applying for a Personal Loan from Hero FinCorp:
- Demonstrates high creditworthiness
- Attracts easy and quick approval
- Helps grab a loan offer at the lowest Personal Loan interest rate
- Improves loan eligibility for a bigger loan amount
- Encourages the lenders to offer easier loan terms and conditions
Steps to Apply for a Personal Loan
Follow these steps to apply for a Personal Loan online:
Step 1: Visit the
Hero FinCorp website or download a loan app.
Step 2: Go to the Personal Loan section.
Step 3: Fill out an online
application form.
Step 4: Upload scanned copies of the required documents.
Step 5: Wait for verification and accept the loan offer to get disbursal in a short time.
Conclusion
Understanding the difference between FICO score vs Experian credit score helps make better decisions when applying for a Personal Loan or another credit product. Maintaining a decent score can help you grab the best loan deals and save on the Personal Loan interest rate. Monitor it regularly and use the above tips to improve if it is low.
Frequently Asked Questions
How is a FICO Score calculated?
To calculate the score, FICO uses proprietary algorithms to analyse data from the credit reports of all other major credit bureaus.
How do the FICO Score and Experian Credit Score differ?
FICO uses credit reports from other credit bureaus to calculate the FICO credit score, while Experian uses its own credit report to calculate the credit score.
Which score do lenders prefer: the FICO or the Experian Credit Score?
In India, Experian credit score is more relevant.
Can I check my FICO Score and Experian Credit Score for free?
You can check your FICO score and Experian credit once a year for free by visiting their website.
Disclaimer: The information provided in this blog post is intended for informational purposes only. The content is based on research and opinions available at the time of writing. While we strive to ensure accuracy, we do not claim to be exhaustive or definitive. Readers are advised to independently verify any details mentioned here, such as specifications, features, and availability, before making any purchasing decisions. Hero FinCorp does not take responsibility for any discrepancies, inaccuracies, or changes that may occur after the publication of this blog. The choice to rely on the information presented herein is at the reader's discretion, and we recommend consulting official sources and experts for the most up-to-date and accurate information about the featured products.
