What’s in Your FICO
What’s In Your FICO® Score
How FICO® Scores Work
- When you apply for credit – whether for a credit card, a car loan, or a mortgage – lenders want to know what risk they’d take by loaning money to you.
- FICO scores are the credit scores most lenders use to determine your credit risk. 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.
The higher your FICO® scores, you the less you pay to buy on credit – no matter whether you’re getting a home loan, cell phone, a car loan, or signing up for credit cards. For example, on a $216,000 30-year, fixed-rate mortgage:
|If your FICO® score is||Your interest rate is||…and your monthly payment is|
|Actual National Interest Rates – Updated Daily|
|760 – 850||5.92%||$1,284|
|700 – 759||6.14%||$1,315|
|680 – 699||6.32%||$1,340|
|660 – 679||6.53%||$1,370|
|640 – 659||6.96%||$1,432|
|620 – 639||7.51%||$1,512|
As you can see in the example above using today’s national rates, a person with FICO scores of 760 or better will pay $302 less per month for a $216,000 30-year, fixed-rate mortgage than a person with FICO scores below 620 – THAT’S A SAVINGS OF NEARLY $3,624 A YEAR. You can see that it pays – literally – to improve your FICO scores.
How to Get Started
The first step to improving your FICO scores is reviewing your current FICO scores and credit reports. FICO Deluxe offers instant online access to all three of your current FICO scores and credit reports. FICO Deluxe also includes an explanation of the positive and negative factors affecting your score and provides access to the FICO score simulator, which helps you decide the best ways to improve your FICO scores over time.
If your FICO scores are less than the median FICO score of 723, the next step is learning how to make your FICO scores better. Suze Orman’s FICO Kit Platinum is your best choice. It’s the ideal starting place if you’re new to learning about managing your personal credit risk and how to repair credit over time.
If your FICO scores are 723 or higher, Score Watch is the right choice for you. Score Watch provides continuous monitoring of your Equifax Credit Report™ and FICO® score, notifies you when you may qualify for better interest rates, delivers alerts when changes to your score and report are detected, and shows you key factors affecting your FICO score and how a lender views you.
If you’d like a more customized product recommendation, try Which Product Is Right for You? – based on your answers to a few brief questions, we’ll tell you what myFICO products make the most sense for you.
Others who have viewed this page also viewed these pages:
- Online Credit Scores Often Differ From FICO Scores – Why there is often a difference between online and FICO credit scores.
- Credit Scoring and How it Works – Credit scoring, also known as FICO scoring, is a statistical method of assessing the credit risk of a loan applicant.
- FICO® – What is a FICO credit score?