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FICO Scores: Getting Credit Where Credit Is Due

Posted on June 16, 2010
Filed Under Finance, Self Help | Leave a Comment

While most people know that it is important to maintain a good FICO score , sometimes mistakenly called a FICA Score, many are not quite sure of what that means. Also known more simply as your credit score, it is basically a formula used by banks and creditors to determine whether or not you present a risk when it comes to lending you money, as well as how much they will allow you to borrow and at what interest rate.

The higher your rating is,the less risk there would be in granting you a loan whether for a mortgage, car, school or business, etc. The lower your score, the less likely you would be to get one. The same goes when it comes to getting car insurance. Many companies will examine your credit report before determining what kind of policy they would be willing to offer you. In fact, whenever you apply for money you authorize the prospective lender the right to examine it. However, when too many people actually check your report within a short period of time, it will actually act to the lower your score.

To pull your credit record from any of the three major recording agencies, Experian, TransUnion and Equifax, creditors will  need your social security number as well as your name, and address. The report will also show your date of birth as well as employment information as means of identification. None of this information however, has any actual bearing on the scores. What really counts is the data listed on what are called the “trade lines,” or your actual credit accounts, such as bankcards, mortgages and other loans, etc, who issued them, your account numbers, when you first received the account, the credit limits and history of your payments, as well as balances still owed.

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