Bad Credit? No Credit? All About Credit and FICO Scores

Mention credit scoring or FICO to most people, and you've got a conversation topic that's about as pleasant as income tax or root canals. "That's going to go onto your credit report" evokes much the same loathing from a modern consumer as "that's going on your permanent record" got from a schoolchild a couple decades or further back.

As recently as a couple years ago, credit scoring in general, and FICO scores in particular, were almost mystical entities that were all-but-inaccessible to the average consumer. Sure, you could pony up ten to twelve bucks and get your score, but there was no guide to interpreting the furlongs-per-fortnight number you got, and only cryptic hints as to why your score was the way it was. I remember rather vividly pulling my score a few years back, and under the explanation was indecipherable gobbledygook that even a lawyer would have had difficult wading through. I finally told the lady at the bank it would be much simpler for the computer to just print the words YOU SUCK! at the top of the page--that at least would have been clear.

Google wasn't even your friend then...you could enter in a credit scoring topic and get five different answers, some contradictory, none authoritative. It was enough to make someone with bad credit put their fist through their own monitor. What made this supremely annoying was that your credit score was--and is--a major indicator of your financial life. Not knowing your credit score and trying to plan things like mortgages and car purchases is like not knowing your weight, blood pressure and cholesterol levels and trying to manage your health. A good credit score can save you enough money (through lower interest rates) over the life of a 30-year mortgage to buy a whole new house.

What a difference a few years makes. While misinformation still exists on the Internet and elsewhere, consumers now have authoritative, easy-to-understand sources of information to turn to to acquire, understand, and manage their credit scores. For starters, you can order real Fico Scores/Reports
online by clicking the link in this sentence.

Think you're already getting FICO scores? Maybe, maybe not. Unfortunately, there are many non-FICO credit scores offered by banks and other vendors that are not the same as FICO scores. These scores often deviate from FICO scores by dozens, sometimes even around a hundred points. Since mortgage lenders, car loan providers, credit card companies, and most other creditors use FICO scores, FICO scores are the scores you want to obtain. If you currently get a "credit score" for free with a checking account, credit card, or other service, chances are it's not a true FICO score and therefore is not indicative of where you actually stand with prospective lenders.

The FICO scores available via the link above come with a copy of your credit report. Moreover, the score reports also contain detailed, easy-to-understand annotation that tells you why your score is where it is, and what you can do to improve it. Gone are the Magic 8-Ball type cryptic numbers and code-words.

As part of my effort to educate consumers on how to profit from the current economy, I have put together a Web site (and I'm talking a real site, not some crappy link farm) called www.allaboutthebenjamins.org that gives detailed information on FICO scoring. The site shows you how to improve your FICO score yourself without resorting to gimmicks or costly and often ineffective credit repair services. My site helps you improve your score by enabling you to understand and correct the factors that lower it rather than applying Band-Aid "solutions" like renting other people's lines of credit.

Once you've ordered your scores and checked out my Web site, continue on to the FICO Forums, which contain the most well-informed user base on the planet concerning FICO scoring and credit issues in general. Overstating just how knowledgeable and willing to help the denizens of the FICO Forums are would be rather difficult; there are some Vulcan-class brains over there.

This is the Information Age. Be informed, and take command of your credit. We're coming up on some unprecedented opportunities to buy housing on the cheap, and you don't want to be left out.