Author: John Hunter
FICO scores are calculated by Fair Isaac, other credit scores also exist – here you will find your FICO credit score explained. The median FICO score in the USA is 723. 13% of the population have scores above 800. 15% have scores below 600. Some things you might think would affect your credit score don’t: income, where your live, your age, your occupation or your employment history.
As an example of how your FICO credit score affects your interest rate, in this example for 36 month $25,000 car loan:
FICO Score Rate Monthly payment
720-850 7.3% $774
690-719 8.1% $784
660-689 9.6% $801
620-659 11.0% $819
590-619 14.3% $858
500-589 14.9% $866
The FICO score is calculated using only the information in your credit history. So checking the information the credit agencies have for you and correcting any errors is important. In the USA you can get real free credit reports from the government created source: www.annualcreditreport.com. There is no fee and you can view it once a year online immediately. You can choose to see the reports from the 3 major companies all at one time or look at one, then in 4 months the next and so one – which is nice because you can get a view every 4 months for free. If errors are found, they should be explained to the powers-that-be and removed right away if possible.
Example of Mortgage Payments Depending on FICO Credit Score
This post “Your FICO credit score explained” was written by
John Hunter from Curious Cat Investing and Economics Blog
If you are more interested in learning about the Canadian credit score, take a look at “Your Canadian Credit Score Explained”
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interesting. i don’t think we have that in australia. every bank has their own internal calculations and more likely than not, if you don’t fit the bill you get denied rather than given the option to pay a higher rate.
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Jerry
We Finance Loans