Your FICO score is a critical element that companies use to determine whether or not to give you credit.
If you've been turned down for a loan recently, or if you simply wish to be more financially literate in order to improve your situation, this is for you.
If you're wondering what the letters FICO stand for, they stand for the Fair Isaac Corporation which came up with the idea in the first place.
It may have a funny name, but your score is a serious financial matter for you to consider.
More important than the meaning of the letters is how your FICO score is used on a daily basis.
Credit agencies calculate your score based on your credit history.
The more late payments you have, and the more behind you are on each payment, the worse your score will be.
This credit score, by the way, can range from 400 to 800.
Lenders such as mortgage companies, credit card companies, and banks will use your score to help them decide whether not to give you a loan.
If they decide to give you credit despite a lower score, you will likely play a much higher interest rates on your loan.
Of course, there are other factors that come into play when you apply for loan.
The state of the national economy including current interest rates will play a part in whether not you can obtain a loan.
Even if you have a low FICO score, you may still be able to find a lender who is willing to let you borrow.
Chances are, however, that the interest rates will be substantially higher than those given to someone with a better credit history.
If you find yourself in this situation, you may want to postpone your request for a loan until your financial situation (and thus your credit score) has improved.
That brings this to our final point which we would like to make.
Don't despair if you end up in a poor financial situation with a load of debt and a low credit score.
This is not the ideal situation, of course, but there is hope to be sure.
Work on improving your FICO score by gradually paying off your debts starting with those that are most past due.
With dedication and the right amount of sacrifice, you can rebuild your financial standing in time.
If you've been turned down for a loan recently, or if you simply wish to be more financially literate in order to improve your situation, this is for you.
If you're wondering what the letters FICO stand for, they stand for the Fair Isaac Corporation which came up with the idea in the first place.
It may have a funny name, but your score is a serious financial matter for you to consider.
More important than the meaning of the letters is how your FICO score is used on a daily basis.
Credit agencies calculate your score based on your credit history.
The more late payments you have, and the more behind you are on each payment, the worse your score will be.
This credit score, by the way, can range from 400 to 800.
Lenders such as mortgage companies, credit card companies, and banks will use your score to help them decide whether not to give you a loan.
If they decide to give you credit despite a lower score, you will likely play a much higher interest rates on your loan.
Of course, there are other factors that come into play when you apply for loan.
The state of the national economy including current interest rates will play a part in whether not you can obtain a loan.
Even if you have a low FICO score, you may still be able to find a lender who is willing to let you borrow.
Chances are, however, that the interest rates will be substantially higher than those given to someone with a better credit history.
If you find yourself in this situation, you may want to postpone your request for a loan until your financial situation (and thus your credit score) has improved.
That brings this to our final point which we would like to make.
Don't despair if you end up in a poor financial situation with a load of debt and a low credit score.
This is not the ideal situation, of course, but there is hope to be sure.
Work on improving your FICO score by gradually paying off your debts starting with those that are most past due.
With dedication and the right amount of sacrifice, you can rebuild your financial standing in time.
SHARE
