FICO: What Is a Good Credit Score?
FICO.
You've likely heard the term before.
Likely while applying for a loan or on one of those late night infomercials.
It's not the latest in quick meal preparation gadgets though.
FICO is an acronym for Fair Isaac Corporation.
Fair Isaac is the company who first developed and used the system of credit scores.
It's popularity lies in it's reputation of being an accurate and fair measure of a persons credit worthiness.
Much like other scoring systems, it was created to help simplify the credit approval process.
The FICO score, or Credit Score, can be one of the most important numbers in your financial life.
It takes into account every statistical number of your financial history, breaks it down, and then crunches it back up into a number.
The data that they use to determine your score is provided (primarily) by the three major credit bureaus.
Experian, Trans Union, and Equifax.
Each receives information from your creditors and keeps it on file for a length of time.
Income is not tracked when creating your FICO score.
A credit score ranges from as low as 300 to as high as 900.
The average of all Americans is about 720, and is considered to be a pretty good score.
In most cases, a credit score of less than 500 is considered the highest risk category and is unlikely to get any but the worst rates.
Ratings between 500 and 600 are very poor, and, while they may be able to get loans, the terms and interest rates will be very poor as well.
As the score increases from 600, the chances of loan approval and better rates increase as well.
Scores of 650 and higher are generally considered to be good.
Loan approval should be fairly easy and interest rates should be better as well.
Anything over 700, and the borrower will likely receive the best rates available as well as the better terms.
And, anything over 760 will likely get the absolute best rates and terms available.
You should know what your credit score is, and learn what it takes to improve your credit score.
Not only does it give lenders a peek at your credit worthiness, but it can give you a great idea of what to expect the next time you go shopping for a loan.
You should also check for any errors in the credit report, as negative items can be cleared easily if they are incorrect.
You've likely heard the term before.
Likely while applying for a loan or on one of those late night infomercials.
It's not the latest in quick meal preparation gadgets though.
FICO is an acronym for Fair Isaac Corporation.
Fair Isaac is the company who first developed and used the system of credit scores.
It's popularity lies in it's reputation of being an accurate and fair measure of a persons credit worthiness.
Much like other scoring systems, it was created to help simplify the credit approval process.
The FICO score, or Credit Score, can be one of the most important numbers in your financial life.
It takes into account every statistical number of your financial history, breaks it down, and then crunches it back up into a number.
The data that they use to determine your score is provided (primarily) by the three major credit bureaus.
Experian, Trans Union, and Equifax.
Each receives information from your creditors and keeps it on file for a length of time.
Income is not tracked when creating your FICO score.
A credit score ranges from as low as 300 to as high as 900.
The average of all Americans is about 720, and is considered to be a pretty good score.
In most cases, a credit score of less than 500 is considered the highest risk category and is unlikely to get any but the worst rates.
Ratings between 500 and 600 are very poor, and, while they may be able to get loans, the terms and interest rates will be very poor as well.
As the score increases from 600, the chances of loan approval and better rates increase as well.
Scores of 650 and higher are generally considered to be good.
Loan approval should be fairly easy and interest rates should be better as well.
Anything over 700, and the borrower will likely receive the best rates available as well as the better terms.
And, anything over 760 will likely get the absolute best rates and terms available.
You should know what your credit score is, and learn what it takes to improve your credit score.
Not only does it give lenders a peek at your credit worthiness, but it can give you a great idea of what to expect the next time you go shopping for a loan.
You should also check for any errors in the credit report, as negative items can be cleared easily if they are incorrect.
