In 1989, The FICO SCORE was released to the world by William R. Fair and Earl Isaac, who founded a computer software company. They developed and sold their first credit system back in 1958. FICO (short for the Fair-Isaac Co.) was the first credit-risk model that provided a universal and impartial tool for evaluating consumer risk. The FICO SCORE is a three-digit number (between 300-850) based on credit data from your credit reports. It helps lenders predict how likely a person is to repay a loan. Over 90% of ALL credit decisions made in the USA today use the FICO SCORE!
A good FICO SCORE can literally save you THOUSANDS of $$$$ in interest and fees to lenders. A good FICO INSURANCE SCORE (FICO homeowners scores range from 200-997) can save you BIG $$$$ on your homeowner insurance premiums. It can also save you BIG $$$$ on auto insurance premiums (FICO auto scores range from 250-900) depending on what state you live in. Using credit scoring for auto insurance is banned in California, Hawaii, and Massachusetts. Other states have restrictions but not an outright ban. One should be over 700 on both scores.
To improve your FICO SCORE, we must first examine the FICO “Scoring Formula.” Fico data is grouped into 5 categories:
Now that we have broken down the FICO “Magic Formula,” consider using these “Lucky 7” tips to improve your credit rating; hence, improving your FICO SCORE: