Most of us have heard of the term FICO score but what is it and how does it affect you? The term FICO is the abbreviation for Fair Isaac Credit Organization. Your "FICO score" summarizes your credit risk, based on a snapshot of your credit report at a particular time. A credit score helps lenders evaluate your credit report and estimate the amount of risk that they will undertake if they do business with you.
The range of FICO scores are from 300-850 with 850 being excellent or the best credit score that you can achieve. There are three credit reporting agencies; Experian, TransUnion and Equifax. When you ask for a mortgage, the lender may pull scores from all three agencies and use the average score to determine your interest rate. The interest rate that you are given on a mortgage can affect your payment by hundreds of dollars a month so you want to make sure that your score is as high as possible before applying for a loan.
The best way to determine and track your credit score is to run your credit report every year. In the state of California, every person is entitled to one free credit report per year. To learn more about obtaining your free credit report contact the Annual Credit Report Request Service at:
P.O. Box 105281
Atlanta, GA 30348-5281
1 877 FACT ACT (1 877 322 8228)
www.annualcreditreport.com
You can also obtain your credit report by calling the agencies directly at the following numbers:
Equifax: 800-685-1111, www.equifax.com
Experian: 888-397-3742, www.experian.com
TransUnion: 800-888-4213, www.transunion.com
Look for information on improving your credit, how credit cards affect your credit score and more in future posts!
In health,
Brian & Cherie
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