0
Fair Isaac (FICO) provides a mathematical risk score that lenders use to determine creditworthiness in a snapshot. Score alone does not assure credit will be issued. For example, someone with a high credit score but a childsupport judgment may not be granted a loan.
Lenders use the score in two ways:
1) To "tier" you or categorize you in relation to their policies regarding the minimum score you must have to obtain a given loan type. Different lenders view this in different ways. Lender A might say scores above 750 are excellent and scores below 670 are not acceptable. Lender B might say scores above 720 are excellent and scores below 650 are not acceptable.
2) To "price" you or use your score category to determine the interest rate or fees you will pay, or cap the amount of money you may be granted.
Still curious? Ask our experts.
Chat with our AI personalities
Ezra
Beau
LaoAdd your answer:
Earn +20 pts
What does the acronym fico stand for and what is its primary use?
FICO stands for Fair Isaac Company, the company that created--and computes--this credit score. Although other companies also compute credit scores, FICO is the most trusted, and most used, score.
What is the difference between credit score and FICO score?
Credit scoring , sometimes called risk scoring, is a rating by a credit bureau to determine your credit worthiness and the likelihood and timeliness of loan repayment. A credit score may impact whether or not you receive credit as well as other credit terms such as percent interest rate, etc. Lenders consider several factors, including a credit score, when extending credit (http://www.extension.umn.edu/distribution/businessmanagement/M1180.html). Today, most creditors determine whether they are going to lend or not based on your FICO score. The scoring system got its name from the company Fair Isaac. Fair Isaac is an independent company that came up with the scoring method and software used by banks and lenders, insurers and other businesses. Each of the three major credit bureaus (Experian, Equifax and TransUnion) worked with Fair Isaac in the early 1980's to come up with the scoring method (http://money.howstuffworks.com/credit-score.htm).
Is a credit score of 580 a fair score?
Poor would probably be a better adjective to describe 580. Fair Isaac describes anything as below 550 to be "awful".
What types of services does the company Fair Isaac offer to consumers?
Fair Isaac, now known as FICO, is a company that provides several different services. One service they offer is global business consulting, where they can help companies make smarter decisions that may lead to increased revenue, decreased costs, and improved customer experiences. They also offer consumers the chance to check their credit risk scores.
How is a FICO Score different from a Credit Score?
FICO stands for Fair Isaac Corporation, which is a company that calculates the credit score that most creditors use to determine your creditworthiness. So, your FICO score is a type of credit score. They use the information that each of the three credit bureaus (Experian, Equifax, TransUnion) possess on each consumer, and they turn that information into your FICO score. However, there are many other companies, including the credit bureaus themselves, the create their own versions of your credit score, and these scores are often different than your FICO score, since they are not using the same mathematical calculations to come up with your score.
