May 15 2020

Fico corp #Fico #corp

Fico corp


What Exactly Is a FICO Score?

The three-digit number, which affects the likes of your interest rates and insurance premiums, has several versions.

By Ben Luthi, Contributor | Nov. 5, 2018, at 9:00 a.m.

Your FICO score can impact your interest rates, credit applications and even your ability to rent an apartment, so it may be worth the cost to monitor the score. (Getty Images)

Your FICO credit score is a three-digit number that lenders use to get a snapshot of the health of your credit history. The number is based on the information in your credit report from one of the three national credit bureaus, Experian, Equifax and TransUnion.


How Does Checking Credit Affect Score?

Lenders typically use your FICO score, as well as some other factors, to determine whether to approve your application for credit and what interest rate you’ll pay. “Healthy credit scores can also result in lower insurance rates, and they can also affect how landlords view a potential tenant,” says John Danaher, president of consumer interactive at TransUnion.

Knowing what your FICO score is and how to improve it is critical if you plan to borrow money.

About FICO

FICO, which is short for Fair Isaac Corp., was founded in 1956. Two years later, it started pitching its first credit scoring system to lenders. It wasn’t until 1989, however, that it introduced its general-purpose FICO score, which is similar to the model it uses today.

Fast forward to today: FICO has introduced nine total versions of its base model FICO score, plus industry-specific scores for certain types of credit. With each new scoring model, FICO has changed its algorithm in an effort to provide lenders with a better way to predict the level of risk for each borrower.

In the latest version, for instance, FICO treats medical collections differently from other collection accounts, doesn’t include paid collection accounts in its calculation and considers rent payments reported by a landlord.

FICO Score Ranges and Factors

The FICO score has a range from 300 to 850, with 740 or higher considered very good or exceptional credit and 579 or lower considered poor credit. Since each lender has its own criteria for determining creditworthiness, it’s possible for some lenders to have different ranges from what FICO has published.

Your FICO credit score is made up of five factors, each with a different level of influence. Here’s how those factors break down:

While each of these factors has a percentage tied to it, they’re not hard-and-fast rules. “That percentage can vary depending on the very specific information contained in an individual’s credit bureau file,” says Can Arkali, principal scientist of analytics and scores development at FICO. “If we’re looking at a record of an individual who has never missed a single payment, the importance of that category is not going to be as pronounced.”

In that situation, how much debt the person has or how much of the available credit lines they’re using may play a bigger role in calculating their FICO score, Arkali adds.

Other FICO Credit Scores

When you check your FICO score, you’re typically looking at a base model FICO score, which factors in your entire credit report based on the factors above.

But if you’re applying for a credit card, auto loan or mortgage, the lender may choose to pull an industry-specific FICO score to determine your creditworthiness. “The industry-specific models are very much focused on the consumer behavior on that particular product type,” says Arkali.

FICO auto score. This credit score has a range of 250 to 900, and the majority of the auto industry relies on it to make lending decisions, says Arkali. The score includes information used to calculate the base model FICO score but gives more weight to your past experience with auto loans and leases.

Getting access to your FICO auto score isn’t cheap. You’ll need to sign up for one of FICO’s credit monitoring services, which cost between $19.95 and $39.95 per month, depending on which one you choose.

FICO bankcard score. Like the FICO auto score, this one also has a wider range of 250 to 900. And as you would expect, it focuses more on your past experience with credit cards than with other types of credit.

“In the credit card industry, it’s roughly 50-50 between the use of the base model and the bankcard-specific model,” says Arkali.

You can also get access to your FICO bankcard score if you sign up for one of FICO’s credit monitoring plans. Alternatively, you can access it for free if you have a credit card with Citi, SunTrust or First National Bank of Omaha.

FICO mortgage score. Instead of using an industry-specific model like the auto and credit card industries, mortgage lenders use previous versions of the base model FICO score.

These models tend to have a more conservative approach to scoring, which may be in a mortgage lender’s best interest considering the size and term of a mortgage loan. You can get access to the versions mortgage lenders use by signing up for one of FICO’s credit monitoring plans.

Non-FICO Credit Scores

Depending on where you go to check your credit score, it may not be a FICO score at all. Each of the three credit bureaus, for instance, has its own proprietary credit score. Plus, several other companies offer their own version of a credit score. Some examples include:

The most popular non-FICO credit score is the VantageScore. Many credit monitoring services offer free access to your VantageScore instead of your FICO score.

On the surface, this may sound like a problem. But both scoring models consider many of the same factors, which means that your FICO and VantageScore credit scores are usually in the same ballpark. If you’re looking at one of the other scores listed, it may not be as close.



Hard vs. Soft Credit Inquiries

Find out how different types of inquiries affect your credit score.

Where to Get Your FICO Score for Free

FICO and the credit bureaus offer credit monitoring services that include access to your FICO score for a one-time or monthly fee. But there are also ways to view your FICO score for free.

For example, several major credit card issuers offer free FICO score access to their cardholders as a benefit. Examples include American Express, Bank of America, Barclays, Chase (Chase Slate cardholders only), Citi, Discover and Wells Fargo.

If you don’t have a credit card or your card issuer doesn’t offer FICO score access, another option is Discover Credit Scorecard. This tool, which is available to all consumers, offers access to your FICO score and a breakdown of what’s affecting your score.

How to Improve Your FICO Score

If your FICO score isn’t quite where you want it to be, it’s usually easy to tell what you need to do to improve it. But according to Danaher, it’s far more important to focus on your overall credit health than your score. By developing good credit habits, you can solve the core issues that are affecting your credit score and prevent them from happening again.

To start, get a copy of your credit reports from and read through your credit reports to find what may be bringing down your score. You can get one free copy of each bureau’s report once a year.

Specifically, look for errors, late payments or collection accounts and credit cards with high utilization. If there’s nothing wrong and you’re relatively new to credit, it may just mean that you need to continue doing what you’re doing and be patient.

If, however, you do notice something off, address it as quickly as possible to develop good credit habits and get your FICO score back on track. Here are some other best practices to use regardless of what you find on your credit reports:

As you follow these tips and address other potential problem items on your credit reports, you should see positive changes over time. And while you won’t see overnight results, developing good credit habits can help you establish a solid credit history and get access to more favorable borrowing options.



USA News. American News.

News latest news news today news headlines breaking news new current news world news top news latest news today,

headline news online news today's news headlines daily news local news breaking news today new news to day news recent news latest news headlines top news today top news stories news stories national news international.

News news update current news today today's national news news updates headlines news update today latest breaking news breaking news headlines latestnews latest national news english news latest world news latest,

news update latest news headlines for today hot news today headlines today news websites current news events the news today's news headlines in english current news headlines top news headlines national news headlines top.
Headlines latest headlines newspaper headlines today latest it news top stories current news stories news sites.

Written by admin