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If you’re a financially independent adult who’s just beginning to get their feet wet in the world of personal money management, one question may be lingering at the back of your mind: just what exactly is a FICO score? Is it different than a regular credit score, or just one part of it? How is it calculated, and by who? How does it effect your likelihood of procuring a loan? These questions about FICO scores are a good place to start, and Green Light Auto Credit couldn’t be happier to help customers fill out the preliminary form they need to start the process of securing good financing.
For starters, FICO is an acronym of the names of its originators: The Fair, Isaac and Company corporation based out of San Jose, California. The FICO score formula, now just commonly known as a credit score, was introduced in 1989 by the FICO corporation and quickly became the template by which most credit bureaus and agencies would assess the viability of their applicant candidates.
FICO scores are calculated using a proprietary formula that pulls from five key factors from the credit reports of applicants: their payment history, their amounts owed, the length of their credit history, your mixed credits among credit cards, retail accounts, installment loans, and the calculated risks and gains of opening a new credit account. Credit scores typically are calculated within the range of 250 to 800. The higher your score the better, while a lower score means less ideal prospects of applying and securing a loan.
There are a number of excellent and immediate solutions to reducing the strain on your credit rating. The most obvious way is to pay back your loans in a timely and complete fashion, setting reminders for yourself and keeping a check of your personal finances. Closing out lines of credit that only serve to make you more dependent on borrowed cash, taking stock of your credit report, and searching for discrepancies that saddle you with inflated costs and fees can also help to substantially chip away your debts and improve your FICO credit score rating.
Bad Credit / No Credit Financing Guide Answers to your Credit Score Questions
If you want to know more about what exactly a FICO credit score, feel free to contact us at (866)-845-1603 to answer any of your pressing questions regarding your credit score.