It’s the talk of the financial town. Your Fair Isaac credit score, or Fico score is a numeric measure of how financially trustworthy you are. This number determines much more than you might think.
You may have heard that if you go to the bank for a home loan, your fico score determines if they say yes but did you know that it plays a part in determining your interest rate on your credit cards? Did you know that it plays a part in the price of your auto insurance?
If you knew those two facts, let me give you one that may alarm you: Your Fair Isaac credit score can determine your employment. Especially if you apply for a job where you will be involved with the finances of a company, often your credit is checked. Here’s why: If you will be making key decisions about a company’s money, don’t you think they would want somebody who makes the right decisions with theirs?
Your Fair Isaac credit score ranges from 300-850. (or higher) This score measures your statistical probability of being late paying your bills. The table below shows you the breakdown. Most people score between 600 and 700 with only 11% of the population scoring in the 800’s.
Score Percentage of Population Delinquency Rate
300-499 1 87%
500-549 5 71%
550-599 7 51%
600-649 11 31%
650-699 16 15%
700-749 20 5%
749-799 29 2%
800 and higher 11 1%
Is the Fico score the only measure of your credit? There are other scores, each reported by the three credit bureaus as well as other independent measures but only the Fair Isaac credit score matters.
You may be wondering how much your number changes your loan rates. The answer is quite drastically. If your score is 560 or below expect to pay between 4.3% and 5% more than those with good or excellent credit.
Now that you’re scared of your score, the good news is this: Providing you pay your bills on time, don’t take out a lot of loans, and practice good financial discipline, your score will be fine.
Now that you know, go find out what your score is. It’s easy to find. Click here or on the link below to see your score today.