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FAQ
We offer answers to frequently asked questions about our services, products
and more!
What is a FICO score?
A FICO score is a credit score developed by Fair Isaac & Co. Credit scoring is a method of determining the likelihood that credit users will pay their bills. Fair, Isaac began its pioneering work with credit scoring in the late 1950s and, since then, scoring has become widely accepted by lenders as a reliable means of credit evaluation. A credit score attempts to condense a borrowers credit history into a single number. Fair, Isaac & Co. and the credit bureaus do not reveal how these scores are computed. The Federal Trade Commission has ruled this to be acceptable.
Credit scores are calculated by using scoring models
and mathematical tables that assign points for different
pieces of information which best predict future credit
performance. Developing these models involves studying
how thousands, even millions, of people have used credit.
Score-model developers find predictive factors in the
data that have proven to indicate future credit performance.
Models can be developed from different sources of data.
Credit-bureau models are developed from information in
consumer credit bureau reports.
Credit scores analyze a borrower's credit history considering
numerous factors such as:
- Late payments
- The amount of time credit has been established
- The amount of credit used versus the amount of credit available
- Length of time at present residence
- Employment history
- Negative credit information such as bankruptcies, charge-offs,
collections, etc.
There are really three credit scores computed by data provided by each
of the three bureaus--Experian, Trans Union and Equifax.
Some lenders use one of these three scores, while other
lenders may use the middle score.
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