Have you ever wondered how accurate your credit score actually is? If you have, you’re not alone. Credit scores are one of the most important pieces of financial information out there, and yet there is a lot of confusion about how they are calculated and what factors influence them.
One of the most popular credit scoring products on the market is CreditWise from Capital One. But how accurate is it, really? Let’s take a closer look.
How CreditWise Works
CreditWise is a product of Trans Union, one of the three major credit bureaus. That means that the information it uses to calculate your credit score comes directly from Trans Union’s database.
The algorithm that CreditWise uses to calculate your score is similar to the one that FICO uses. However, there are some important differences. For example, CreditWise gives more weight to recent activity than FICO does. That means that if you have a late payment or other negative items on your report, your score will drop more quickly with CreditWise than it would with FICO.
Another difference is that CreditWise does not factor in your income or employment information when calculating your score. That means that if you have a high income but are carrying a lot of debt, your score will be lower with CreditWise than it would be with FICO.
Accuracy of CreditWise Credit Scores
According to Capital One, CreditWise has an accuracy rate of 95%. That means that for every 100 people who use it, 95 will get an accurate score and 5 will not. However, it’s important to note that this number only applies to people who have a Trans Union credit report. If you have a report from Equifax or Experian, your accuracy rate will be lower.
It’s important to keep in mind that no credit scoring system is perfect. They all use different algorithms and weigh different factors differently. That means that there will always be some variation between scores from different providers.
Conclusion
While no credit scoring system is perfect, CreditWise from Capital One is one of the most accurate on the market. With an accuracy rate of 95%, you can be confident that you’re getting an accurate picture of your creditworthiness.
