UNDERSTANDING CREDIT

Your credit history is a record of how you handle your finances, especially how well you pay back your debts. This credit history is reviewed based on generally well established scoring system.

Credit bureau scores are often called “FICO Scores” because most credit bureau scores used in the US are produced from software developed by Fair, Isaac and Co. They developed a confusing mathematical formula to determine how high a risk you are as a credit applicant.

Fair Isaac Corporation (NYSE: FIC) is the preeminent provider of creative analytics that unlock value for people, businesses and industries. The company’s predictive modeling, decision analysis, intelligence management, decision management systems and consulting services power more than 25 billion mission-critical customer decisions a year. Founded in 1956, Fair Isaac helps thousands of companies in over 60 countries acquire customers more efficiently, increase customer value, reduce fraud and credit losses, lower operating expenses and enter new markets more profitably. Most leading banks and credit card issuers rely on Fair Isaac solutions, as do insurers, retailers, telecommunications providers, healthcare organizations, and government agencies.

There are often credit bureau scores, but FICO is used most often by creditors. With FICO, a higher score is desirable. Be aware that other credit bureaus may evaluate credit worthiness differently, and a high score may mean a consumer is a bigger risk.
The FICO Score is used to make billions of credit decisions each year, including more than 75 percent of mortgage loan originations. In addition, more than 40 of the nation’s 50 largest financial instructions rely on the FICO Score to determine an individual’s credit risk.

A consumer-credit report is a factual record of a person’s credit-payment history. Legislation governs who has access to a person’s credit history, but typically it is open to lenders who need a quick and objective way to determine whether to grant credit.