Finding Out Your FICO Score

A growing number of creditors, as well as insurance companies, employers, and landlords, use something called a FICO score together with (or even instead of) your credit history to make decisions about you. Your FICO score is a numeric representation of your creditworthiness and is derived from your credit history information. Like your credit history, the score is a snapshot of how you’ve managed credit in the past. As such, your FICO score is generally considered an indicator of how well you are likely to manage credit in the future.

Actually, a variety of different credit scores exist. Equifax, Experian, and TransUnion have developed their own credit scores. (Each credit-reporting agency sells its credit score on its Web site.) But the FICO score has become the industry standard.

Your FICO score can range from 300 to 850. The higher, the better: A score of at least 720 is considered to be very good. If your score is well below 720, you may still qualify for credit from some creditors, but you’ll be charged a higher interest rate and you may not qualify for as much credit as you would like. Likewise, insurance companies may be willing to sell you insurance, but you’ll probably pay extra for the coverage and you may not be able to purchase as much insurance as you would like. When you have a low FICO score, some landlords will not rent to you, and you may not qualify for certain kinds of jobs, especially those that involve handling money.

You can raise your FICO score by improving the state of your finances. For example, your credit score will go up if you.

• Pay down your account balances.
• Begin paying your debts on time.
• Build up your savings.
• Minimize the amount of credit you apply for.
• Correct problems in your credit histories.