Managing Credit Rating - Introduced By "The Fair Isaac Company
It was in the 1950's that a man called Fair Isaac decided to come up with a system to determine which individuals were worthy of credit and which ones were not.
He called his system a credit rating and this has become a standard practice in the United States known as FICO.
The credit rating was assigned to individuals based on their record of repayment of loans and debt to all kinds.
This little 3 digit number can be the cause of you getting approved for a loan or being disapproved.
From that time on everything anyone does in the US with respect to the use of any kind of financial instrument, including credit cards, even loans and mortgages, reflects in your credit history and this is a snap shot of your credit worthiness.
The Fair Isaac Company receives this data every month from creditors and compiles this information after which a complicated mathematical formula is applied, which demonstrates your credit worthiness.
Though this information is not meant for public viewing it is available to any financial institution you may seek any financial aid from.
With the average rating of a US citizen being 720, it is common knowledge that the higher the number goes the better is your credit rating, or you worthiness of a loan.
On the other hand if your credit ratings falls below the 650 mark the more likely you are of being denied a loan.
Unfortunately this number also hiders your ability to get rental accommodation.
People with credit scores lesser than 600 are very high credit risks and are almost certain to be denied any form of financial assistance from any institution.
It is, however, not a rule of thumb that you will definitely get disapproved due to your credit rating.
Creditors are well aware that your ratings can go wrong due to a number of factors.
Medical bills could be one of the reasons that you could not keep to your repayment schedule.
Accidents which required much needed automobile repairs are another reason for you to skip payments.
There is an endless list of reasons that are not in your control and so your credit ratings go wrong.
The IFCO does not take these into account, but some credit companies do when considering your loan application.
Nevertheless it is important to stick to a repayment regime in order to maintain a good credit score.
Bad credit history will only hamper your efforts in securing a much needed loan in times of emergencies.
So, maintain good credit records with all three debt bureaus.
And if your credit history is not too good it is time you started working on improving it.
He called his system a credit rating and this has become a standard practice in the United States known as FICO.
The credit rating was assigned to individuals based on their record of repayment of loans and debt to all kinds.
This little 3 digit number can be the cause of you getting approved for a loan or being disapproved.
From that time on everything anyone does in the US with respect to the use of any kind of financial instrument, including credit cards, even loans and mortgages, reflects in your credit history and this is a snap shot of your credit worthiness.
The Fair Isaac Company receives this data every month from creditors and compiles this information after which a complicated mathematical formula is applied, which demonstrates your credit worthiness.
Though this information is not meant for public viewing it is available to any financial institution you may seek any financial aid from.
With the average rating of a US citizen being 720, it is common knowledge that the higher the number goes the better is your credit rating, or you worthiness of a loan.
On the other hand if your credit ratings falls below the 650 mark the more likely you are of being denied a loan.
Unfortunately this number also hiders your ability to get rental accommodation.
People with credit scores lesser than 600 are very high credit risks and are almost certain to be denied any form of financial assistance from any institution.
It is, however, not a rule of thumb that you will definitely get disapproved due to your credit rating.
Creditors are well aware that your ratings can go wrong due to a number of factors.
Medical bills could be one of the reasons that you could not keep to your repayment schedule.
Accidents which required much needed automobile repairs are another reason for you to skip payments.
There is an endless list of reasons that are not in your control and so your credit ratings go wrong.
The IFCO does not take these into account, but some credit companies do when considering your loan application.
Nevertheless it is important to stick to a repayment regime in order to maintain a good credit score.
Bad credit history will only hamper your efforts in securing a much needed loan in times of emergencies.
So, maintain good credit records with all three debt bureaus.
And if your credit history is not too good it is time you started working on improving it.
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