Get Free Credit Score – FICO Report

Mike Clover asked:




Fair Isaac has announced a 2009 makeover to the credit scoring system that most companies use to determine your credit worthiness. The company says as many as half of all borrowers will see their scores go up or down by about 20 points as a result.

One bit of good news is that an occasional missed payment will not carry the detrimental weight it once did. They’ll be looking more at history and patterns of financial behavior.

Another change will see the amount of balances a consumer carries as being more important than the total number of accounts open.

Scores will still be on a 300- 850 point scale, but now instead of 10 categories, consumers will fall into one of 12 categories. Infrequent problem borrowers will no longer be lumped in with habitual delinquents.

The new rules are also once again allowing piggybacking – the method by which parents or other friendly mentors can allow a person to become an authorized user on their credit card accounts, and thus “borrow” some of their good credit history.

This practice was common a few years ago, and was widely used by parents to help children begin building a good credit history. Then private companies began marketing a service that paired people with bad credit with others with good credit, so they could qualify for loans.

Seeing that abuse – and unintended use – FICO barred the practice. Parents could still add kids as authorized users, but it wouldn’t assist them in building credit. Now that opportunity is back, but it will be more difficult to establish. FICO says it now has technology that will let it filter out anyone who is trying to play the system.

In addition to young people starting out, women have traditionally been added as authorized users on their husband’s accounts – thus giving them a credit score. Fair Isaac estimates that 30% all credit card holders are authorized users, rather than card owners.

Under the new rules it will take longer for these women to build credit, so a better plan might be for them to get a credit card in their own names, even if it must be a secured card.

Secured credit cards are, of course, also a good way for parents to help children establish a credit record.

Equifax and TransUnion will be first to roll out the changes, which will occur some time this year. Keep an eye on your credit score to see how it will affect you. And in the meantime, keep working to build the score, just in case you’re one of the ones whose score might fall as a result of the makeover.

Ella

Alex Josephson asked:




Though every one has heard about the credit score scale, not many know their own FICO score. Many have no idea if their own score is rated good or bad. Understanding the workings of a credit score scale is important for a person who engages in regular credit transactions like loans, credit cards and mortgages. Read further to see how certain elements are important to broaden your perception of the subject and increase your FICO scale rating.

A numerical scale of 300 to 850 is considered to be the range of the credit score scale. If you have not made any credit transactions in your life then your FICO score will remain at 300. Alternatively if you execute your transactions within time limits and have very good financial history, your score will stand at a perfect 850. Usually a persons FICO rating will be indicated at a point between these two high and low points depending on the person’s financial past. If you happen to receive a score below 850 but have performed without default in all your credit settlements don’t start worrying because on average, a credit score scale indication above 690 is considered as a good score.

Lenders perceive the impracticalities involved in attaining a perfect 850 due to prevailing economic and financial trends in the global context. If a person records a score of 720 and higher in the credit score scale such persons are eligible to receive better financial fringes in terms of credit i.e. lower interest rates, premiums and minimum down payments on their credit facilities. A bracket between 680 to 720 a little down in the credit score range still indicate good credibility status and will ensure you receive decent credit facilities.

Any score recorded further down the credit score scale is considered as warning signals. If the score oscillates between 630 to 680, a credit facility may be granted yet, the pertaining terms will not be as rosier has the score been higher. Then the lenders will charge you higher interest rates, comparatively bigger down payments and premiums for your lending facilities. Now if you have seriously defaulted in your credit obligations in the past, your FICO rating will be poor and a score that falls below 630 will act as warning for your lenders making it extremely difficult to procure any credit facility.

You should act by obtaining copies of credit reports issued by credit bureaus and check for any inaccurate entries that could be disputed by you. Even a few extra points will take your position higher on the credit score scale and closer to attain the supreme level of perfection.

Allen

Dr. Jennifer Baxt, DMFT asked:




Credit scores are a big part of our lives. Credit scores are what dictate what we can buy, what kind of homes we can get and what kind of cars we can buy. If we have good credit, it is easy to get these things, but if we have bad credit, we may find that it is harder than we imagined to get a home, car or credit card. With a poor credit score, interest rates can be very high. A high interest rate can lead to a difficulty making payments.

The sub-prime mortgage crisis was essentially created by lenders giving mortgages to people who did not have the credit for it. Their poor credit score meant the interest rates were very high, although the interest rates were low to begin with. Then the people could not afford both the mortgage payment and the interest payment that could reach 20 percent. They fell farther and farther behind, and that led them to be foreclosed on. The people that this happened to had poor credit generally, usually below 600. However, if you have an average credit score, where do you sit between 300 and 850?

For FICO, it sits at around 650. If your score is in that range, you will be able to get a loan or credit card without much trouble. You will deal with higher than normal interest rates though when compared with someone who has a credit score of 780. If your score is above 650, you will have little trouble with getting a loan, and the interest rates will be much lower than those who are below you credit-wise.

If you have a lower-than-average credit score, you will need to work to improve your FICO credit score through various means, including paying your bills, lowering your debt-to-income ratio, paying off your debt and more.

If you think your credit score is decent, you will probably go to see if you can get a loan. However, if you do this on a regular basis, creditors will see that you have asked for credit from a variety of sources and they label you as a compulsive borrower, which could hurt you in terms of getting a loan.

It is important to remember that just because you have average credit, it does not mean you should be happy with it. You should try and do everything you can to improve your credit by paying your bills on time and ensuring you do not owe too much on debts. Average may be good for everyone else, but is it good enough for you? Your credit is decent, but it could be better.

This is why it is important that you know your credit score. By knowing your credit score, you can find out how much you will be paying for an interest rate, and what your ability to pay back a loan will be like. Thankfully, you get one free credit report each year, so be sure to use that credit report so you can find out your credit score and see if you are average.

Randy

Zach Ford asked:




A credit score, also know as a FICO score, is a number, ranging between 300 and 850, which is representative of your financial history. Banks commonly use this number to determine the risk of a potential client not repaying their loan. By maintaining a higher FICO, banks will view you as a less risky client, and offer you lower interest rates and better terms.

What is the Average FICO Score?

Your credit is calculated based on several financial factors, both past and current. Some of the more important of these factors include; payment history, current amount of debt, length of financial history, number of consumer credit cards, and whether you have defaulted on any previous debts.

The average American FICO score is approximately 700-720, which is considered to be good credit and will result in favorable interest rates and terms. The range of this scale spans from 300 to 850, with a higher number representing better credit. Anything above 650 is considered to be good, while anything below this number is considered to be poor or bad credit.

Improve Your Credit – Check Your FICO Score!

Unsure of where your financial history stands? Don’t worry, most American’s don’t know either. If you are curious about your credit and would like to find out what your FICO score is, the Internet offers countless websites to help you accomplish this. By frequently monitoring your credit report, you will be able to eliminate any errors, out of date information, or fraudulent entries, which can reduce your overall score.

Claude

adsamxdr67 asked:

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Virginia

Rob Bettis asked:




Years ago, in a land far far away, lending officers (the people in the bank that reside in the glass offices) actually worked for a living. I know it is hard to believe, but its true. When an individual came into the bank, looking to borrow money, the lending officer would spend time researching the person – their job, their reputation, their financial status, etc. The lending officer would use this information, along with rational thought (which has since become extinct), and determine whether the person was fit to borrow money and the likelihood of them repaying the loan. This information would be compiled and used to determine how much the bank would lend the individual, if at all.

Well…then came computers. And with computers came ‘data’. You see, computers don’t think rationally. They only store & process data. Bankers needed a method to standardize & mass produce this lending process and be able to store the corresponding ‘data’. [Enter: FICO score.] Named for the firm that developed the process, the FICO score is generated by a mathematical formula (something a computer can do) to provide the general credit worthiness of an individual. The formula based off of information found in your credit report – simply an individuals log of all things financial. A weighted scale of five financial factors combine to derive the FICO score. The breakdown of these factors is found below. Scores range from 300 – 900. Most folks fall in the 600-750 range.

There are three agencies that provide this mathematical decision making: Equifax, Experian and Trans Union. Now days, when banks make lending decisions, they use these ‘credit bureaus’ to automate the decision making process. This means roughly 75% of the time, everything makes reasonable sense. However, since there is no rational human behind the process, 25% of the time a dart-throwing monkey could provide the same service.

Example: A company owner who makes well-in-excess of $100,000 dollars a year applies for business credit cards for her company. As the owner of the company, her credit report is used to establish the credit limit on the company credit card account. Visa, via an Equifax report, denies her request for a $50,000 corporate credit limit (less than 50% of her annual income and far less than the average net profit of the company). Meanwhile, I (a person who makes no where near that much money) regularly receives pre-approved credit card offers for well-in-excess of 50% of my income. What gives? The FICO monkey strikes again.

Note the FICO score calculation breakdown:

35% – Payment History
30% – Debt Ration
15% – Length of Credit History
10% – Types of Credit
10% – Inquiries

The FICO score is comprised of a person’s debt history. If you don’t borrow money, your FICO score is penalized. Subsequently, the FICO score says you must consistently borrow money, if you want to borrow money. That’s a little-bit stupid.

Most people only feel the FICO effects when they are applying for home loans or financing automobiles. Although most lenders lean on the FICO crutch, some folks still lend the old fashion way. If you are anti-debt, find a mortgage company that does ‘manual underwriting’ (old fashion lending). As far as cars, if you pay the note off in a timely manner, you will hardly notice the deference in FICO scores.

How do you check your FICO digits? By law, everyone is entitled to check their credit report (for free) once a year – per credit bureau. This will provide you a copy of the finance log on file at the corresponding bureau. Everyone is also entitled to one free annual credit score report. To check your score and/or reports, I recommend AnnualCreditReport.com. Despite the catchy tunes of FreeCreditReport.com, the aforementioned source, AnnualCreditReport.com, is the official government-sponsored source for the free reports. Personally, I check one bureau every 4 months. This allows me to monitor my reports all year long, without incurring any costs. Nifty huh?

Micheal

Rachel Rishul asked:




FICO did it again. Being the leader in providing the best analysis when it comes to credit scores, FICO has unveiled its latest scoring product called FICO 8 Mortgage Score. In addition, this product is readily available among the top three U.S. credit reporting firms. Also, it offers better ways for people in monitoring their credit score.

The latest innovation by FICO was an enhanced version of its predecessor, which offers a lot of features that will surely help every person in their quest to accurately determine their credit scores. It can also help to anticipate the performances of every mortgage to help people to decide what company will be the best for them. It can also help them to maximize their decision makings when it comes in their efforts to find the best and high quality service to support them in every way.

In addition, the FICO 8 Mortgage Score will truly aid every person to access their credit scores easily and exactly in order to enhance their mortgage performances. To add in its superiority, the new system will also have a much bigger scope all throughout the U.S. in order to support every citizen in their scores.

People can also use this latest breakthrough in the toughest situations, as it can face challenges in order to compete and then later prevailed against its top competitors. On the other hand, lenders do not need to worry because it can provide the top of the line service in ensuring that people have the capabilities to apply for a loan. It is important that lenders should know if these people can really avail of their services in order to avoid any troubles that they can result in unsuccessful transactions.

However, people should know that FICO’s previous services are included within the latest offerings. It maintained its 300-850 credit scoring systems and its minimum scoring criteria. The new service from FICO will surely help every person who wishes to apply for a loan, as it can make their lives easier in order to achieve their attempts to successfully obtain insurance.

FICO 8 Mortgage Score was built particularly in order to help lenders and people to attain a fruitful relationship. Because of this latest service, people will get to have the outstanding criteria in knowing their credit scores faster and accurate than ever in order to help them to find the best deals for them.

Terry