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FICO Number: the biggest little number you might never know … unless you check your credit score!

Do you know what your FICO score is? Probably not. But don't fret; you're ahead of the game if you even know what a FICO number is in the first place. And yet this obscure figure plays a huge role in determining if you will get that low interest credit card, home mortgage or pre-approved loan.

So this is how it works: Your financial behavior is run through a computer that uses a complex mathematical equation to arrive at your personal credit score. The scale for the score runs from 300 to 900, with most consumers falling in the 600 to 750 range. Credit bureaus that license the software for generating FICO scores (the abbreviation for the leading company in the field Fair, Isaac & Company) agree not to share scores with individual consumers. Banks are not obligated to show them to you either, although some may if you ask (or you can now order your FICO Number yourself online for $21.95 CAD).

FICO Beacon is the credit score passed along to potential lenders who use it to decide your credit rating

According to the lending industry, the beauty of the credit score is this: Decisions that once took days or weeks can be made in hours because lenders have access to these mathematical models that weigh a potential borrower's financial patterns and predict how that borrower will behave, based on tens of thousands of other consumers who have similar credit profiles. So efficiency is the key, but if this sounds a bit fishy to you, you're not the only one.

For example, concern is growing over the power of credit scoring, especially since consumer access to credit scores is restricted. Most have never heard of the score, much less of the impact it can have on all areas of their financial lives, from credit card applications to mortgage consideration. Moreover, even if you're one of the lucky ones who knows all of the above, you still might never find anyone who will tell you what your own score is.. From a business perspective, this is reasonable, because if the equation and personal scores were revealed, Fair, Isaac & Company would be out of their prominent position as industry leader. But from the perspective of many consumers, this is just one more way for big business to control everyday people. It's only natural to want good credit, and so it seems logical that we be told how to achieve it and how we rank in comparison to others. But for now, all we have to offer is Fair, Isaac & Company's 'comprehensive' list of FICO score components, taken from its web site. Included in the list is: 

  • Past Payment History 
    Past due items on file, severity of any delinquency, presence of any adverse public records, such as bankruptcy, judgments, lawsuits, liens, etc. This category alone suggests that you should make bankruptcy your last resort option only. 
  • Amount of Credit Owing on Accounts 
    How many accounts you have with balances, proportion of credit lines used to credit available proportion of installment loan amounts still owing. 
  • Length of Time Since Credit Established 
    Time since you opened your account(s) and how active those account(s) have been. 
  • Acquisition of New Credit 
    How often you have recently searched for or obtained new credit and your relative success at establishing positive credit history following past payment problems. 
  • Types of Credit Established
    Number of and types of credit established. Now, it's really nice of the folks at FICO to tell us all this, but the average borrower still doesn't know what factors are weighted more heavily than others, how recent is 'recent' or even exactly how many credit cards is too many or too few. 

But while we're all drowning in this sea of misty numbers and torrential downpour of half-advice, there are people out there who make a living trying to help the average consumer. They can help you avoid bankruptcy, which will make a world of difference when it comes to your credit score, as well as guide you through other steps to strong financial health. Steps are being taken to release the FICO score from its shadowy cage, but until then, we could all use a little help.


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