Credit Report FICO score

Credit report with FICO score?

Yes, your credit report FICO score is one of the most important criteria used to evaluate you when you apply for credit. The FICO score is also the first part banks and credit card companies turn to when they evaluate your credit report. The higher your FICO score, the lower interest rates you pay on any lines of credit such as credit cards and student loans.

FICO Score Explanation

FICO score explained: Your FICO score ranges from 300 to 850, and is usually divided into six ranges. These six ranges correspond to the increments in interest rates that lenders offer. Generally, you would be eligible for certain kinds of credit if your FICO score falls between 500 to 850. However, to be eligible for the best interest rates, your FICO score rating needs to fall in the highest range: 720 to 850.

Any score below 500 is considered a high financial risk and would put you in the ‘sub lenders’ category. It would be difficult for you to obtain lines of credit.

About FICO score

Your FICO score will be used when creditors decide whether or not to extend you credit. Creditors rely mainly on the Three C’s of good credit – character, capacity and collateral. Put in a larger picture, your FICO score mainly reflects your ‘character’.

‘Character’ refers to how trustworthy you are in dealing with credit. Do you pay your bills on time, and what is your debt to credit limit ratio?

The other two criteria are capacity and collateral. Capacity refers to your level of financial stability; how many sources of income do you have, and do you earn enough to be able to meet interest payments consistently?
Collateral refers to the extant assets you have that your creditors can take into possession if you default on the credit you owe. This may be your house, your car, or even stock portfolio.

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