Free FICO Scores Becoming Standard From Credit Card Issuers
More and more people are finding out something that used to be difficult to find out—at least for free.
Credit scores used to be top-secret and hard to get your hands on, unless you paid for them. You can get your free annual credit report from all three bureaus, sure, but if you want to know your credit score, it won’t be on there anywhere.
Now, thanks to new transparency laws handed down by the Feds, it’s much easier to find out your actual credit score. In fact it’s hard not to find out, if you have a credit card. Most credit cards are now offering FICO scores each month with your statement.
The latest financial institution to get on board with free FICO scores is NASA Federal Credit Union. They join Discover card and many other credit card issuers who are complying with the Fed’s edict that people should have free and easy access to their credit information.
FICO Scores are a popular way for prospective lenders to find out whether someone is a good bet to pay back a loan, or pay a mortgage, or pay their credit card balance. More than 90% of lenders assess risk based on a high FICO score.
When assigning a FICO score, the analytics agency looks at a lot of information, including every loan you’ve ever taken out, how long it took to pay it back, whether you’ve ever defaulted on a loan, how much money you owe to credit cards, and how must room you still have left on those credit cards.
The five factors in a FICO score
The five things that go into a credit score are:
• Payment history—do you pay your bills on time, that kind of thing.
• Debt to credit ratio—how much you owe, versus how much room you have left on your credit card. Should be lot s of room left on your card—don’t run it up to the maximum, ever.
• Length of credit history – the longer, the better. This is why to never, ever close a credit card if you can help it.
• Types of credit – they like to see a good mix, not just one type of loan.
• Amount of new credit applied for. If you’ve been going nuts applying for credit cards, it doesn’t look great for your FICO score.
The good news is, it’s now easy to find out your FICO score, and for free, too. Check and see if your credit card issuer is one of the many who are providing you with a free score.