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" We are here to help you understand your FICO scores, and the difference between different scoring models and FICO"

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What Are FICO Scores?

  

"FICO is a publicly-traded corporation (under the ticker symbol FIC) that created the best-known and most widely used credit score model in the United States. The FICO score is calculated statistically, with information from a consumer's credit files. The FICO score is primarily used in credit decisions made by banks and other providers of secured and unsecured credit. It provides a snapshot of risk that banks and other institutions use to help make lending decisions. Banks may deny credit, charge higher interest rates, demand more collateral, or require extensive income and asset verification if the applicant's FICO credit score is low. Applicants with higher FICO scores may be offered better interest rates on financial instruments such as mortgages or automobile loans. Lenders usually establish different credit score cut-offs to determine to whom they are willing to lend."

Credit scores are probably the most confusing aspect of the whole "Credit" picture. There are several different scoring modules and score types, but only FICO scores are used when lenders make the decision to grant you credit.

There are a couple of different types of credit scores that you will need to recognize.

*FICO Scores*

*Vantage Scores*

A good rule of thumb is to know that anything that you are applying for that will have an interest rate associated with it will make their decisions based off of FICO scores.

A good credit score is determined by a certain formula, otherwise known as a mathematical algorithm. All of the information within your credit report is used to calculate this formula to show a bad credit score, an average credit score, or a good credit score. They compare yours to millions of other people to see an average. The whole reason for doing this is so that lenders can see how likely you are to pay back a debt. It is the credit worthiness that comes from calculating your credit scores. You should check your credit score every 3 or 4 months, or use a credit monitoring service to check you credit score or scores from all 3 credit agencies.