What’s Up With FICO Scores

April 21st, 2008

I had the opportunity to sit down with Kimberlie Hooker from Andorra Credit Repair (www.andorracreditrepair.com) to talk about FICO scores and the common misconceptions about them. The interview was very informative and I learned a lot about what goes into a FICO score and how small things can have a big impact. A FICO score is what a lender looks at when you try to obtain credit, for example a mortgage lender will look at your FICO score to determine what type of interest rate you get. One thing to know is that a credit score, unless it says it is a FICO score, is not what lenders see and it can in fact be significantly different from your FICO score.

There are five different things that affect a credit score: payment history, capacity, credit history, types of credit and new credit. Paying attention to each of these is extremely important to maintaining good credit.

She also mentioned the opportunity given to consumers to check their credit reports once a year through each of the three agencies, Transunion, Equifax and Experian. By going to the site www.annualcreditreport.com you have access to your credit reports from these three agencies for free. But remember that these are only your credit REPORTS, not credit scores. The place to get your accurate credit score is myfico.com. BUT you will be charged to get your FICO score.

Check back for our next installment in our Credit Month series.

Post a comment if you have any questions about credit or suggestions for future shows.

-Kelsey Balcaitis, Talking Cents Team Member

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Credit 101

April 14th, 2008

I had the opportunity to sit down and talk with Kimberlie Hooker from Andorra Credit Repair (www.andorracreditrepair.com). We discussed the basics of credit including topics such as identity protection, credit scores, myths of credit and many other topics regarding credit.

One thing she made very clear was how important it is to know what impacts your credit score. Things like late payments can impact your credit score 50-100 points. She stresses the importance for college students to know what impacts your score and knowing how to build good credit. She also talks about the importance of protecting your identity. Websites such as www.optoutprescreen.com can stop the pre-approved offers from coming to your mailbox. Another important protection is the option to enact a security freeze on your credit report. The security freeze prevents anyone from pulling your credit score without a pin number that you are provided with once you use a security freeze.

Hooker suggests that a revolving credit card is a good way to build credit. But she stresses the importance of not maxing out your cards, only using up to 30% of the available credit and making your payments on time. Other forms of credit such as a car loan help to build credit as well. If someone has issues with their credit, they could also try a secured credit card.

It’s important to remember that credit impacts a lot of things in your life such as buying a home, getting a car, even getting a job.

Pay attention for the next credit installment, FICO Scores and Everything About Them with Kimberlie Hooker, which will be available next week.

Post a comment if you have any other questions about credit or suggestions for other shows.

- Kelsey Balcaitis, Talking Cents Team Member

Listen Now:

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