Fico Scores

FICO is the company most creditors use to determine your credit risk. Every individual has three credit scores from three bureaus; Experian, TransUnion, and Equifax. The average of these three scores makes up your FICO score. Each bureau keeps a record of your credit activity. Missed payments will hurt your score while lowered debt and consistency in payments will keep your score high.

A credit score is very important. Building good credit and maintaining it is essential to obtaining a good APR or interest rate. Good credit scores also qualify an applicant for better rewards programs. Your FICO credit score will determine your loan agreements, credit limits, and approval on credit card offers.

FICO is not the only credit score agency, some credit providers score the applicant themselves or rely on a different agency. Some agencies are BEACON® Score, Experian/Fair Isaac Risk Model and EMPIRICA®. Some of the other agencies use a different scoring method than FICO. A high FICO score is a positive credit score while some agencies the higher the score the worse your credit is. It is important you understand these differnces when researching your credit score.

Credit scores are constantly changing and it is important to monitor your score periodically, especially before a big loan application or credit card application. It is also important to check the accuracy of bad marks on your credit. Mistakes are made and it is your responsibility to report any mistakes to the credit bureau.