What Is My FICO Score About Anyway?!
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Your FICO Score is a very important part of your credit report and it makes a huge difference on the interest rates YOU pay for your credit cards, mortgage, car loans, personal loans, and even your insurance! Knowing all about your FICO score and how you can increase your score is of a huge benefit to you. Read on to learn more..........
FICO stands of Fair Isaac COmpany. The Fair Isaac Company invented the credit risk score back in the 1960's. Fair Isaac is the company that sparked a revolution by pioneering a credit risk scoring method for the financial services industry. Most lenders and banks use your FICO score to ascertain the credit risk involved in lending YOU money. The lower your FICO score, the HIGHER your interest rate. Each lender has different criteria for assessing risk. For instance one lender may decide that anyone with a FICO credit score of less than 650 will pay 10% interest on a car loan while another lender may decide that if your credit score is lower than 700 that you will pay 11% interest on your automobile loan. This is why it is imperative to know YOUR FICO score BEFORE you shop around for your next loan.
No matter whether you agree or not with the lenders assessment of your financial condition, if you want a loan, you can bet that if you have a low credit score, you will pay much more than someone who has a high FICO score. It may seem unfair, but it is the way it is.
Before you go shopping for your next loan or credit card, get your free credit report, learn what your FICO score is, then find out what lenders and banks are charging for interest rates based on your score. If your credit score is on the low side, go over your credit report to determine if there are any errors. Your credit card agencies, banks, loan companies, etc. are not infallible and may have made errors and reported that you were late on your payments, which will lower your score. Perhaps someone has stolen your identity, charged up credit card in your name and not paid the bills, making it appear that you are a poor credit risk and in turn lowering your FICO score. Find out what is on YOUR credit report and get it fixed BEFORE you go to your lender for a loan. It is well worth the time and effort to clear up errors on your credit report which could save you hundreds or thousands of dollars over the life of your loan.