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					Title:
What Does FICO Mean To You?


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Summary:
Although it may not be a term you're familiar with, the term FICO can be a determining factor as to whether
or not you qualify for a credit or loan. But what is FICO, and how does it affect you when it comes to your
creditworthiness?


The acronym FICO actually stands for Fair Isaac Company, which was the company that originally created a
mathematical model for the credit reporting company Experian. FICO was designed as a tool that could be
used by creditors to evaluate the ...



Keywords:
FICO,FICO score,Jeanette Fisher,credit score



Article Body:
Although it may not be a term you're familiar with, the term FICO can be a determining factor as to whether
or not you qualify for a credit or loan. But what is FICO, and how does it affect you when it comes to your
creditworthiness?


The acronym FICO actually stands for Fair Isaac Company, which was the company that originally created a
mathematical model for the credit reporting company Experian. FICO was designed as a tool that could be
used by creditors to evaluate the potential risks involved in lending money to consumers. In reality, there are
other similar models that have been developed by other credit bureaus, but all of their results are referred to
by the industry as FICO scores.


FICO scores are calculated by examining the answers to a number questions, based on the information in
your credit and on your income-to-debt ratio. The answers to each question carry a certain number of points,
and when all the answers are added up, that number represents your FICO score.


Your FICO score will depend upon such things as how long you've lived at your current address, what your
job is, your income-to-debt ratio, how often you've been late on payments, how much debt you currently
have, the amount of credit you're using already, and the length of time you've had your credit established.


The most heavily weighted factors in determining your FICO score will be the current balances on your
credit cards, having either too few or too many revolving accounts, the number of accounts you have that
carry balances, how many accounts you've opened over the past twelve months, the length of time you've
had your accounts, your past due accounts, and the number of credit inquiries that have been made in your
behalf.


A good FICO score would be at least 650. If your score is 620 or less, you'll be considered a risky candidate
for a loan or credit card by potential creditors. A score between 620 and 650 will put you into a "possible"
category, which means that you may need to provide more information to the lender before you'll be
approved for credit. A FICO score of more than 650 will put you into the "go-ahead" category, since it will
show potential lenders that you've been a good credit risk in the past.


The higher your FICO number, the better, of course, since you will begin to get better interest rates on loans
the closer your FICO number gets to 850.


It may not be a well-known number, but your FICO score can be important to your financial well-being.


Copyright © Jeanette J. Fisher




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