Brad Stroh is currently co-CEO of Freedom Financial Network and Bills.com. If you would like more of Brad's articles, please visit the Bills.com information on Credit.
When it comes to credit, your FICO score is what counts. If you're new to the credit or home buying game, FICO is probably a very mysterious and confusing word. You probably already know it has something to do with credit; but do you know exactly what your FICO score is and means? If not, read on.
To put it bluntly, your FICO score is a number that determines the interest rate you'll get on a loan. You can find it at http://www.FICO.com. It is a predictive measure used by lenders to rate the probability that you will default on a loan. The higher your FICO score, the lower your interest rate. There it is; the boiled-down, straight-to-the-point definition of a FICO Score. But, as you probably guessed, there is much more to know about a FICO score and what affects it. For starters, FICO is actually short for Fair Isaac Corporation. Founded in 1956, the Fair Isaac Corporation is the financial institution that developed the FICO credit score. This credit rating is used to measure your credit risk. FICO scores can be obtained through most major consumer reporting agencies in the U.S. Whenever you make a purchase that involves your credit (such as a car, home, boat, etc.), creditors obtain your FICO score; however, your score is not released to you. You can find out your FICO score on your own, but the creditors you partner with to finance personal belongs don't have to provide you with the financial information they find out about you. However, if you're turned down for financing, creditors and lenders are required to provide you with a reason why you were turned down and, if your credit score was a factor, your credit score. They are also required to specify which credit agency they used to establish your credit score.
How to Calculate a FICO Score
Your FICO score is calculated based on your payment history, your outstanding balances, length of credit history, any new credit you have, they types of credit you've used, and your credit report. http://www.Bills.com has tools to evaluate how a score is calculated, but in short, it's nearly impossible for you to calculate your own FICO score. Each area of your credit is weighed and used differently in calculating your credit score. However, each area is vital to getting a high FICO score, so you need to be mindful of paying your monthly bills on time and managing your existing credit. Even a few late payments can negatively affect your score.
How to Identify a Good FICO Score
Your FICO score is based on a scale of 300 to 850. To determine your risk factor, creditors take your FICO score and compare it to a FICO score chart. If you have a score less than 620, you're considered "Risky". If you have a score between 620 and 660, you're labeled as "Uncertain". A FICO score between 660 and 720 means you have an acceptable credit rating. Anything over 720 means you have "Perfect" credit.
How to Obtain Your Credit Score
If you want to check out your FICO credit score, the Fair Credit Reporting Act requires the 3 major reporting agencies (Equifax, Experian and TransUnion) to provide you with a complimentary copy of your credit report once every 12 months, but only if you request it (it will not be automatically sent to you every 12 months). However, each agency will most likely have a different score for you depending on the particular credit information provided to that particular agency. So, if you want a better idea of what your credit score actually is, request your credit score from all three agencies and figure out the average.
Your FICO score says a lot about you. It's used by creditors to establish your credit ranking and determine your interest rate on loans and financing. The higher your FICO score, the lower your interest rate will be. So stay on top of your monthly credit card, mortgage, and even cable bills, and pay everything on time. If not, your credit could plummet.
- Related Videos
- Related Articles
- Ask / Related Q&A
- What's Your Fico Score Today?
- Credit Worthiness - How Can I Increase Fico Score?
- Your Home Mortgage Loan and Your Fico Score
- All About Your FICO Score
- The Truth About How to Obtain a Free Fico Score
- What is a Good Fico Score and How to Get One
- How to Read Fico Score and Increase Credit Rating
- Late Payments and a Good Fico Score




Finding Good Foods For Memory
By: Trevor Johnson | 07/12/2009There are many options for good foods for memory if you think your memory needs a boost. For a long time people believed that you could not grow more brain cells when you are an adult but further study has shown that your brain keeps growing and making new connections even as you age.
Best Methods For Improving Your Memory
By: Trevor Johnson | 07/12/2009It is easy to improve the memory on our computers; we just buy a new chip and slot it in. To improve human memory is a completely different task. Human memory involves recalling information that has been acquired and experienced over a lifetime. It is a complex process that involves many parts of the brain.
The mystery behind a smile
By: david | 07/12/2009self improvement, life and style advice
Simple Tips to Keep Your Leadership on the Top
By: acicoinvestments.blogspot.com | 07/12/2009To begin you must be thorough and detailed...........
Reading Articles From the Frozen Food Section
By: Jeffrey Casey | 05/12/2009There is a trend in recent writing with progressed civilization leading the charge. I call it writing and reading frozen food articles. Just open contents, read instructions, apply a couple minutes of your sweet time and voila!
Puppy Training Tips Sit and Lie Down
By: Michelle Spencer | 04/12/2009Once your puppy responds well to the command to come, you can begin teaching it to sit and to lie down. To ensure that you are always in control, you should practice the following exercise with the puppy on the lead. On completing this routine successfully, your puppy will be able to carry out a sequence of commands for the first time.
How to Maximize your Mind Power
By: Jeff Boo | 04/12/2009Mind power is naturally in you and you just need to unleash it. Without using your mind power, your chance of missing out the great things in life can be very high. Visualized your dream with clarity and concentrate on the route to your destination, you will be on your way to achieving what you long in life very soon.
Public Speaking: Tips for Giving a Great Speech
By: Kasan Groupe | 03/12/2009Most people will do anything to avoid having to get up in front of a group of strangers and give a speech. It’s a scary thing knowing that so many pairs of eyes will be staring at you, listening to you and ultimately critiquing you. Yes it’s a stressful situation, especially if you’ve never given a speech before, but anyone can be a successful public speaker. All you need to do is have a little confidence and follow my tips below.
Options To Consolidate Credit Card Debt
By: Brad Stroh | 18/11/2006 | AdviceConsolidate Credit Card Debt When managing your existing credit cards seems overwhelming, one effective way to ease both the financial and emotional burden of the cards is to consider the option to consolidate credit card debt.
Understanding A Second Mortgage
By: Brad Stroh | 13/11/2006 | MortgageIf you're in need of additional funds and you own a home, you may have the opportunity to borrow against your home through a second mortgage. A second mortgage is another name for a home equity loan.
How To Choose A Real Estate Agent
By: Brad Stroh | 31/10/2006 | AdvertisingIf you're selling a home, you need a licensed real estate agent. It is feasible to sell your home on your own (i.e.
Debt Counseling Tips
By: Brad Stroh | 31/10/2006 | AdviceDemand for debt counseling is at a record high; 17 straight quarterly fed rate hikes, slowing home values (harder to get a debt consolidation loan), rising tuition costs, rising gas prices, bankruptcy reform... the list of consumer catalysts into debt couns
How A Reverse Mortgage Works
By: Brad Stroh | 31/10/2006 | MortgageEver wonder how a reverse mortgage works? For folks that have lived in their home for a long time, they may very well be sitting on a gold mine.
Student Loan Advice And Information
By: Brad Stroh | 28/10/2006 | AdvertisingStudent Loans For many students, the dream of getting a higher education just isn't possible without the financial aid of a student loan. Fortunately, there are many opportunities out there to apply for and receive a student loan.
Home Equity Basics Explained
By: Brad Stroh | 11/10/2006 | AdvertisingWhat is Home Equity? Purchasing a home is a huge event in anyone's life. It's an investment that, over time, will yield you a significant profit. As the years progress, the value of your home will increase.