TransUnion uses a proprietary scoring model to arrive at credit scores. The TransUnion score is different from an individual’s FICO score. It is based entirely on the information gathered by TransUnion on the credit activity of the individual. The borrowers are rated on a score of 350 to 850. The credit score report provides an analysis of the score, ranks individuals with respect to others in the same score range, and also offers insight into the manner in which creditors perceive prospects in a given credit range.
The TransUnion credit report offers detailed insight into the reasons for a low score; for example, one learns that contrary to popular belief, sparse usage of credit cards does more harm than good to an individual’s credit score. This is because lenders prefer to give credit to those who have demonstrated healthy credit card use with the ability to repay on time. The report also puts into perspective the effects of late payment on a credit score.
Different numerical weights are assigned to the factors that affect the TransUnion credit score. The factors include current debt, consistency of repayment, duration of account, and types of credit. The TransUnion credit score is used by creditors in assessing risks for loans, mortgage accounts, and credit cards. The score in itself is not an endorsement of an individual’s qualification for a loan.
The TransUnion credit score changes every time the information in an individual’s credit report is updated. An inquiry on an individual’s TransUnion credit score does not affect the credit score as much as delinquencies and the length of time. TransUnion gathers information from various sources such as collection agencies and government agencies.
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