| If have a credit card or if you've ever applied for a | | | | When financial companies consider whether or not to |
| loan, purchased an automobile, or tried to buy a home, | | | | offer a person a loan most go to one of the three |
| it's likely that you've heard of FICO. FICO stands for | | | | major credit reporting agencies to get a credit score - |
| Fair Isaac Corporation. It's a company that began in the | | | | either Experian, Equifax, or TransUnion. |
| 1950s and was founded by Bill Fair, an engineer by | | | | Credit scores range from 300 to 850. Most people in |
| trade, and Earl Isaac, who was a mathematician. | | | | the United States have a credit score from 600 into |
| They created their initial credit rating system in 1956. | | | | the 700s. Because of recent tightening of credit, you |
| Since then FICO has developed more and more | | | | will often need a credit rating of 700 points or more in |
| complex credit scoring software that is used to predict | | | | order to be approved for a mortgage. And generally |
| how credit worthy a person is. It affects you directly | | | | no matter what you want to buy, the higher the |
| because the systems "says" that the lower your | | | | number the less you will pay in interest. |
| score, the more likely it is that you will default on a loan. | | | | Did you know that by law you are entitled to receive a |
| Hence, whomever is considering lending you money will | | | | free copy of your credit report every 12 months |
| charge you higher interest rates to compensate for | | | | Furthermore, the Federal Government authorizes only |
| that possibility. | | | | one site to do this. |