The FICO Score Misconceptions

There are many misconceptions about credit scores out there. There are borrowers who believe that they don't have a credit score. There are others who think that their credit scores don't really matter. These sorts of misconceptions can hurt your chances of gaining employment, obtaining preferred interest rates, and even your chances of qualifying for renting an apartment.

The truth is, of you have a bank account and you pay utility bills, then you have a credit score, and it matters more than you might think. Your credit score can be called many things such as a credit risk rating, a FICO score, a credit rating, a FICO rating, or a credit risk score. All these terms refer to the same thing: the three-digit number that lets lenders get an idea of how likely you are to repay your bills.

Every time you apply for credit, apply for a job, or even apply to some apartment complexes, your credit score is checked. Another misconception is that employers check your credit only if you apply for a job that involves handling money. The fact is that many companies use credit checking as part of their standard background checks.

Make no mistake, your credit report can be checked by anyone with a legitimate business need to do so. Your credit score is calculated based on complex formulas. Things such as your past financial responsibilities, past payment records, credit limits, credit line utilization, open and closed accounts, and public records are all considered. It provides potential lenders with a quick snapshot of your current financial state and past repayment habits.

In other words, your credit score lets lenders know quickly how much of a credit risk you are. Based on this credit score, lenders decide whether to trust you financially. They use this information to approve or decline a loan. Even if approved, your credit score can have a direct effect on the interest rates you pay. Apartment managers can use your credit score to decide whether you can be trusted to pay your rent on time. Employers can use your credit score to decide, perhaps unfairly, how you manage your life. Some employers find that if you're poor with money, you have poor organization skills and no attention to detail -- things that are a must in a corporate environment.

The problem with credit scores is that there is quite a bit of misinformation circulated about, especially through some less than scrupulous companies who claim they can help you with your credit report and credit score -- for a fee, of course.

From advertisements and suspect claims, customers sometimes come away with the idea that in order to boost their credit score, they have to pay money to a company or leave credit repair in the hands of so-called "experts." Nothing could be further from the truth. It is perfectly possible to pay down debts and boost your credit on your own, with no expensive help whatsoever. There are many free resources on the web that will enable you to do just that.

Lee has done it all in the lending business. From loan origination to processing to underwriting, even owning a mortgage company. In http://www.credit-restoration-kit.com, he exploits the secrets of the industry to help fix credit, obtain mortgages, and improve financial standing. Free articles, resources, and a blog.

---

Fair Isaac Corporation Credit or FICO Score

As I am not from the US, I had no... Read More

How to Get Credit Reporting Agencies to Help You

The process of clearing credit can be laborious and frustrating.... Read More

How Your Credit Rating Affects You, and How to Check It

You might not know it, but every time you take... Read More

How To Get a Low Interest Credit Card

Consumers often have the first credit card that they ever... Read More

Credit Counseling Basics

Credit counseling is an option you might want to consider... Read More

Your Credit Score

Credit scores: all lenders use credit scores to determine interest... Read More

Start Building Credit Fast!

There are a couple of reasons for this. You can... Read More

Pitfalls of the Credit Industry

The credit industry if rife with pitfalls. If you have... Read More

Secured Credit Cards- Consumer Tips

Whether you have no credit or damaged credit, secured credit... Read More

Credit Report ? Watch Out for Parking Tickets

The economic downturn of the last five years has affected... Read More

Finding What is on Your Credit Report

A credit report is basically a file about you kept... Read More

Collection Agency Secrets for Collecting on Bad Debt

Getting worried that one of your clients, customers or patients... Read More

Why Your Credit Score is Important

Your credit score can either haunt you or reward you.... Read More

How You Can Avoid Becoming A Victim Of Identity Theft

To reduce or minimize the risk of becoming a victim... Read More

How To Choose Your Credit Card Application

The articles and tips provided on this site are intended... Read More

Which Business Credit Cards with Reward are the Best?

Thinking of applying for a credit card with a reward... Read More

Tips for Credit Card Surfers

Moving money from credit card to credit card to take... Read More

Credit Counseling: Could it Work for Me?

In the face of financial hardship, many seeking a responsible... Read More

All Is Fair In Love, War, and, Your Credit Report - At Least It Should Be! Understanding the FCRA

Fact: Over 150 million Americans have credit report with the... Read More

Credit Cards -- What You Should Know

There are a lot of questions about using credit cards.... Read More

Good Credit -- Essential for the Prospective Home Buyer

Credit is a funny thing. It can be a useful... Read More

Credit Repair Scam - How To Avoid Being A Statistic?

A good credit history is critically important for the consumer.... Read More

Figuring Out the Ever Nebulous Numbers Called Credit Scores

Credit Score FactorsThe information contained on our credit reports affect... Read More

10 Tips To Prevent Credit Card Fraud

Imagine opening your credit card statement one morning and discovering... Read More

SuperCharged Secret 1 of 5 - Credit Card Utopia

I AM THE CONSUMER. AND I HAVE LOW-RATE SUPER-POWERS!Note: The... Read More

14 Common Credit Mistakes

Establishing credit and wisely managing your credit becomes easier when... Read More

I?ve Heard About FACTA; What Does It mean?

What FACTA means is that if you, as an individual,... Read More

Credit Cards and How To Choose Them:

It may seem like a simple question but its important... Read More

Different Ways to Borrow Money

There are many different ways to borrow money. Outlined below... Read More

Why Does Your Credit Card Rate Keep Going Up?

Have your read your credit card contract through completely? Do... Read More

Free Credit Reports - How to Maintain Your Credit Profile

Maintaining your Credit ProfileEvery consumer should be maintaining their credit... Read More

Shoppers Beware - Tis The Season

It's the number one complaint from consumers and it only... Read More

Borrowing on a Credit Card

One of the easiest ways to borrow money of a... Read More