FICO Fitness Fundamentals

fico_scoreA FICO score is the number that determines the interest rate you pay on credit cards, car loans and mortgages. It also determines whether or not your application is approved for an apartment or whether or not you qualify for a cell phone plan. Your FICO score can even affect your ability to get a job. Your FICO score is based on a calculation from the history in your credit reports from these three major credit bureaus: Equifax, Experian and TransUnion.

The FICO score is linked to just about every financial step you take. Basically it boils down to being a number representation of your past and current spending and bill paying habits. For this reason it’s critical you learn your FICO score and that you manage it well.

High FICO scores represent good credit and low FICO scores are associated with poor credit. Your goal should be to keep your score in the 720 to 850 range.

720-850 BEST
700-719
675-699
620-674
560-619
500-559 WORST

To find out your FICO score, select any one of the major three credit bureaus here.

HINT: If you are applying for a loan, you want to select the FICO score obtained from the credit reporting agency that your lender will use. Contact the lender before you apply for a loan and ask which credit bureau they’ll use to consider your loan. Here’s how they match up.

Beacon »»»» Equifax
Experian »»»» Transunion
Empirica »»»» Experian

If you need to raise your FICO score here are some things you can do:

  • Start paying all of your bills on time
  • Reduce your credit to debt ratio (in other words pay down the money you owe.)
  • Don’t close unused cards (having a credit card that is being managed well will work in your favor)
  • Don’t apply for any new credit cards
  • Review your credit report periodically to make sure that it is accurate

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More on this topic (What's this?)
Should I Refinance my Mortgage and Do I Qualify (Saving to Invest, 1/23/09)
Breaking Down and Improving your FICO Credit Score (Saving to Invest, 3/19/09)
Last Day to Access Your Experian FICO Score (Richer by the Day, 2/13/09)
Read more on Credit Score at Wikinvest

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This entry was posted on Tuesday, November 25, 2008 at 9:08 am and is filed under Misc. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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