FICO is the short form of Fair Issac Company, founded in 1956, myFICO is the consumer division of Fair Issac. FICO provides analytics software and tools which are used in industries to manage risk, fight fraud, optimize operations and, meet strict government regulations. myFICO offers informative credit information products, that helps people to take necessary actions to achieve and protect the overall financial health.
About FICO Score
The credit scoring model FICO score was first introduced in 1989. FICO takes credit information and uses it to create scores, which help the creditors to know about the creditworthiness of the individuals. FICO itself is not a credit reporting agency. Information is provided to FICO by one of the 3 major credit reporting agencies – EQUIFAX, EXPERIAN & TRANS UNION.
FICO scores are used by 90% of top lenders to check individuals credit risk. FICO scores determine, how much money a lender will provide and at what interest. High FICO score is always preferable to the lender as it reduces their risk. FICO scores check the below mentioned five factors to determine the credit worthiness of the individual:
One of the most important factors in calculating credit score is about the payment history of the borrower. 35% of the total credit score depends on the payment history. This is taken as a criterion to determine the future behavior of the borrower. FICO focus on both revolving loans – credit cards and the larger installment loan. Defaulting on a larger installment loan will cause severe damage to credit score more than defaulting on a smaller revolving loan.
30% of the total credit score is based on how the borrowers utilize their credit limits. FICO checks the overall amount owed on different types of account, it doesn’t mean that the borrower is in high risk with a low FICO score. If people cannot handle debt responsibility, it is better to maintain low credit balance rather than maxing out the credit limit. Using the maximum limit will cause a negative impact on FICO score. The account balance on credit report reflects the balance which the lender is reported to the credit bureau.
Length of credit history
15% of the total credit score depends on the length of credit history of individual’s. The Length of time each account has been open and the length of time since the last action in the account has been taken place. A longer credit history provides more information. So it is not possible for a person who is new to credit to have a perfect credit score. Individuals without a history should start using credit to improve their scores. Those who are already using credit should maintain long-standing accounts.
Credit Mix & New Credit
Both contributes 10% of the consumer’s FICO score. Credit Mix includes credit cards, students loans, mortgage and automobile loans. Borrowers who are new to credit should avoid opening too much credit accounts. It indicates that they are in financial trouble. On the other hand having different credit accounts with good payment history can improve your credit score.
In determining FICO scores credit mix won’t be a key factor. It will be important if your credit report doesn’t have a lot of information on which to base a score.
Products of myFICO
1 Bureau FICO scores and Credit Monitoring – FICO Essentials 1B
- Instant access to your Equifax Credit Report and FICO scores
- Access to newly released FICO scores 9 versions widely used in mortgage, auto and credit lending
- Monthly access to Updated Equifax Reports and FICO scores
- FICO score 8 can be tracked from Equifax on a historical tracking graph
- Monitoring and updating changes in Equifax credit report, and get FICO Score 8 updates with each new alert.
- Restore your identity with expert identity theft features.
3 Bureau FICO scores, Credit & Identity Monitoring – FICO Ultimate 3B
- Instant Access to your 3-Bureau credit report and FICO scores.
- Access to the newly released FICO scores 9 versions widely used in mortgage, auto and credit lending.
- Quarterly access to updated credit reports and FICO scores.
- FICO score 8 can be tracked from each bureau on a historical tracking graph.
- Monitoring and updating changes in your 3 credit reports, and get FICO Score 8 updates with each new alert.
- With Intelligent Identifying Theft Monitoring threats to your personal information can be detected.
- Restore your identity with identity theft features.
ONE TIME REPORTS AND SCORES
1-Bureau Credit Report and FICO scores- FICO Score 1 B Report
- Instant access to your credit report and newly released FICO score 9 versions widely used in mortgage, auto and credit lending.
- With a detailed analysis, check the top factors that affect your FICO Score 8 from selected bureau.
- With the help of FICO Score Simulator, you can see how different financial decisions, like getting a new credit card or paying down debt may affect FCO Score 8.
3-Bureau Credit Report and FICO Scores – FICO Score 3 B Report
- Instant access to your 3-Bureau credit report and newly released FICO score 9 versions widely used in mortgage,auto and credit lending.
- Easy Comparison of FICO Score 8 and 3 credit reports from each bureau, with a side by side view.
- With a detailed analysis, check the top factors that affect your FICO Score 8 from all 3 bureaus.
- With the help of FICO Score Simulator, you can see how different financial decisions, like getting a new credit card or paying down debt may affect FCO Score 8 from each bureau.
Your use of credit cards has a significant impact on your FICO Score. Proper use of credit cards will help you to establish your credit history, repair a bad credit history or enable you to pay down existing debt faster. Using a Secured Credit card will also helps to establish a good credit. Credit limit of a secured credit card is secured by a security deposit, made by the consumer in the special savings account. The available credit limit will be based on thesecurity deposit. In Prepaid credit card funds available for purchases are per-loaded onto the card. Gift cards and Rebate cards are common types of prepaid debit cards. Security credit card is reported to the 3 major credit bureaus but a Prepaid credit card is not reported. Its use will not have any impact on your credit standing
FICO has developed partnerships with top- tier systems integrators, data providers, technology providers, service providers and processors. FICO serve the end to end analytic and decision management needs of joint customers
through this partnership. Hence FICO partners act as a trusted advisors in planning and architecting solutions in a wide range of industries such as health care, government, financial services and others.