What is FICO? A FICO score is a credit score developed by “Fair Isaac & Co”. Knowing your FICO “score” could be as important as knowing your blood pressure numbers. FICO scores are the cornerstone to obtaining credit, whether it be for a equity line of credit, first or second mortgage, to consolidate loans, a credit card, or a car loan..
The higher your FICO score, the better your credit rating. The better your credit rating, the more money a lending institution is willing to lend to you. If you have a higher credit score, you’re more apt to get a better interest rate on a loan.
Your FICO score is affected by many factors. Do you pay your bills on time? Do you have a lot of outstanding debt? Have you ever filed for bankruptcy? Do you have outstanding judgments? Do you “max” out your credit cards?
You can easily find out what your FICO scores are, plus get copies of your credit reports by signing up for Suze Orman FICO Kit
To quote Suze Orman:
You have three FICO scores, one for each of the three credit bureaus: Experian, TransUnion, and Equifax. Each score is based on information the credit bureau keeps on file about you. As this information changes, your credit scores tend to change as well.
Your 3 FICO scores affect both how much and what loan terms (interest rate, etc.) lenders will offer you at any given time.
Taking steps to improve your FICO scores can help you qualify for better rates from lenders
So, if you’re looking for that equity line of credit, first or second mortgage financing, debt consolidation, car loan, credit card, or any other type of refinancing, get a copy of your credit report, and learn your credit score.
If you have a low credit score, or have poor credit, you may need to consult with a loan officer, financial adviser, or put off that large purchase until you’re in a better financial position.