Definition of 'Precision Score'
A number used by the TransUnion Credit Bureau to quantify the credit worthiness of borrowers. Precision scores used to be called Empirica scores before TransUnion started using the NextGen scoring model. These scores will determine how risky it is for a lending institution to lend money to borrowers.
Don't be fooled by the name though, there are many companies that use this score but call it something else. They include:
- Experian, who uses the term "FICO Advanced Risk Score".
- TransUnion, who uses the term "Precision".
- Equifax, who uses the term "Pinnacle".
Investopedia explains 'Precision Score'
With precision scores, the lower the score the higher the risk for the lender, thus more interest is charged. Every bureau uses different names for their credit rating even though all use the same algorithm. The NextGen scoring model was created by the Fair Isaac Corporation and is used by each bureau - the only difference in scores will be from the information that is available to the credit bureau.