EXIT Realty Foothills Reports On FICO Questions Answered

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EXIT Realty Foothills Reports On FICO Questions Answered

FICO's CEO Exposes 3 Tips to Improve Credit Score

La Verne, CA (Grassroots Newswire) 1/13/2011 --Mark Greene, Chief Executive of Fair, Isaac & Co, gave an interview with Daniel Gross, economics editor and columnist at Yahoo! Finance, this month to help answer a few questions the American consumers have been having lately. It seems there are more and more companies using the FICO score to make decisions about an individual and some of them have nothing to do with credit.

For example, some companies are requiring job applicants to provide their credit score. Auto insurance and health insurance companies are also starting to use FICO as part of the application process. Greene reports that this is not what FICO is intended to do, but it is actually a useful tool for those companies. "People who are good with their finances frequently turn out to be good drivers." The FICO score, however, is only intended for use for financial companies.

Ok, but what is a FICO score? With the FICO score becoming more important in consumerism, let's take a quick look. "The FICO score is a measure of a consumer's financial health and creditworthiness," Greene says. It is a purely statistical number with no emotion behind it. The number ranges for 300 to 850 with the higher number being the better number. These numbers are meant to help financial institutions make sound decisions on their lending, but they are not supposed to be the only factor that they use. Lender should also be looking into background references, their capacity to repay the loan, and collateral.

What FICO takes in to consideration are; How much the consumer is in debt, How long have they had debt (newer debt is risker,) and the debt mixture. Is it all credit card or is there a mix of credit cards, car, and mortgage (the better option.)

Greene give three tips in his interview to help improve the scores.

1. Pay bills on time
2. Don't max out your credit
3. Don't apply for new credit unless you have to

Another quick tip is to avoid foreclosure or bankruptcy at all cost. "One thing people should know is that a foreclosed home or personal bankruptcy is the most severe harm that you can do to your credit score," Greene says. It can lower the score by 150 points and take as much as 7 years to fix.

Consumers can obtain their FICO score from the company at myFico.com.

For more information about EXIT Realty Foothills, please call 909.593.0502. EXIT Realty Foothills is located at 1339 Foothill Blvd, La Verne CA 91750.

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