Taking the Mystery Out of Your FICO Credit Score
Your Credit Card Companies and Fair Isaac Partner to Inform Consumers About
Ways to Manage Their Credit Scores
WASHINGTON, March 21 /PRNewswire/ -- Your Credit Card Companies and Fair Isaac
Corporation (NYSE:FIC), pioneer of the FICO(R) credit scores used by most
lenders to evaluate consumer credit risk, have teamed up to offer consumers
valuable information on how to understand and avoid making mistakes with their
credit scores.
Credit scores are one of the leading factors creditors use in making lending
decisions. FICO credit scores range from 300 to 850 and are calculated from a
host of criteria from consumer credit reports that can be broken down into five
categories: a consumer's payment history, amounts owed, length of credit
history, new credit applied for or taken out, and types of credit used.
The Federal Reserve reports in a Summer 2004 study that nearly 74 percent of
Americans have credit scores of 661 or above. Such a score, according to the
study, indicates that the majority of consumers are low credit risks and are
likely to be eligible for lower interest rates on loans, credit cards and
mortgages.
For a better FICO score, consumers should: * Shop for a loan within a focused period of time. Looking for a mortgage or an auto loan may cause multiple lenders to
request your credit report, even though you're only looking for one
loan. To compensate for this, the FICO score counts multiple auto or
mortgage inquiries in any 14-day period as just one inquiry. To ensure
multiple inquiries do not adversely affect your credit score while
you're shopping for a loan, make them within 14 days.
In addition, the FICO score ignores all mortgage and auto inquiries
made in the 30 days prior to scoring. If you find a loan within 30
days, the inquiries won't affect your score while you're shopping for
credit.
* Pay bills on time. Always paying your bills on time is the best thing you can do to help
your score. If you've been late in paying bills in the past, it's
important to demonstrate more timely payment patterns as soon as
possible. Although late payments shown on your credit report can
adversely affect your score, they will count less over time.
* Check credit reports for accuracy. Errors can happen and you may find one on your credit report. If you do
spot an error, contact the original creditor and all three national
credit reporting agencies -- Equifax, Experian and TransUnion -- so that
the inaccurate information won't reappear later. Be sure to order your
report directly from one of the three credit reporting agencies or an
organization authorized by them so that your request for a credit report
won't be confused with an inquiry from a potential creditor.
As part of the Fair and Accurate Credit Transactions Act of 2003,
Americans are gaining free annual access to their credit reports under a
phased rollout plan that launched in December 2004. Currently, only
residets of the Western and Midwestern part of the United States can
access their reports for free as part of this tiered action. By
September 2005, all residents of the country will be able to access free
reports. On June 1, consumers in Southern states will have free access
to their reports. Consumers can request their free annual credit reports
via the Web at http://www.annualcreditreport.com/, by calling 1-877-322-
8228 or mailing requests to Annual Credit Report Request Service, P.O. Box, 105281, Atlanta, GA 30348-5281.
* Pay off debt, don't move it around. Opening a new credit card account to consolidate debt can lower your
score for a few months. Your FICO score is based on both individual card
debt and the total amount of debt on all credit card accounts, so
consolidating your credit card debt on one card or spreading it over
multiple cards will not help your score in the long run. The most
certain way to help your score is to pay down the amount you owe.
* Contact a legitimate credit counselor for help with financial
difficulties. This won't help your FICO score immediately, but the sooner you begin
managing your credit well and making timely payments, the sooner your
score will improve. For recommendations on how to select a reputable
credit counselor, visit the Federal Trade Commission site at
http://www.ftc.gov/ or Your Credit Card Companies' Web site at
http://www.yourcreditcardcompanies.com/.
FICO scores can be ordered at http://www.myfico.com/. With the credit score,
you will also receive an explanation of your score, suggestions for managing
your score and your underlying credit report. Additional financial management
tools and resources are also available at
http://www.yourcreditcardcompanies.com/.
About Your Credit Card Companies Your Credit Card Companies is a group of financial services companies with a
shared commitment to value and quality service for consumers. Through its Web
site and other consumer information initiatives, Your Credit Card Companies
provides credit resources and a variety of tools that help consumers to better
understand how credit works, to understand and protect their total credit
picture and to manage debt. Its membership includes Chase Manhattan Bank USA,
N.A.; Citigroup; Discover Card; MasterCard International; and MBNA.
About Fair Isaac Fair Isaac Corporation (NYSE:FIC) is the preeminent provider of creative
analytics that unlock value for people, businesses and industries. The
company's predictive modeling, decision analysis, intelligence management,
decision management systems and consulting services power billions of mission-
critical customer decisions a year. Founded in 1956, Fair Isaac helps thousands
of companies in over 60 countries acquire customers more efficiently, increase
customer value, reduce fraud and credit losses, lower operating expenses and
enter new markets more profitably. Most leading banks and credit card issuers
rely on Fair Isaac solutions, as do insurers, retailers, telecommunications
providers, healthcare organizations and government agencies. Through the
http://www.myfico.com/ Web site, consumers use the company's FICO(R) scores,
the standard measure of credit risk, to manage their financial health. DATASOURCE: Your Credit Card Companies; Fair Isaac Corporation CONTACT: Daniel F. Drummond of Your Credit Card Companies, +1-202-585-2591, +1-800-337-0590, or ; or Craig Watts of Fair Isaac Corporation, +1-415-492-5399, or Web site: http://www.yourcreditcardcompanies.com/ http://www.myfico.com/ http://www.ftc.gov/ http://www.annualcreditreport.com/
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