Managing Your FICO Scores

Credit is one of the most critical components in our life, yet the least regulated, and even less understood.   More and more, less understood because how you manage your debt affects your credit.  Today, credit is measured by a FICO score. It is a snapshot of an individual's credit at any time.

FICO is a very statistically significant predicative indicator of how well you will repay debt.  FICO is an anagram for Fair Issac Company.  It is essentially an algorithm for the forty-two variables in your credit report.  Depending on what version the repositories use, Equifax (version 96), Transunion (version 98), and Experion (FICO 2 '98), you will get a different score. The scores range from approximately 300 to 900 points.  The higher the score the lower the risk of default.  Below 600 the odds are 8-1 you will be 90+ days late on your mortgage payment.  Above 800 and the odds are 1299-1 you will be late.