Notes

=Research Notes = Websites: http://financialplan.about.com/od/creditdebtmanagement/tp/credit-debt-101.htm http://financialplan.about.com/od/creditdebtmanagement/a/FICO-Credit-Score.htm

I. Your FICO Credit Score  A.FICO is the abbreviation for Fair Isaac and Co.  B.The Fair Isaac Company developed custom software back in the 1980s that helped other companies determine a credit risk based on a number derived from a person’s credit history.  C.The number soon became a standard that was adopted by the three main credit bureaus: Experian, TransUnion, and Equifax  D.The FICO score goes from 300 to 850

II. Credit Score vs. Credit Report  A.Your credit report is simply a detailed account of your credit history.  B.The report would contain information such as: Current credit accounts, Payment history, Credit inquiries, and Credit utilization, and Bankruptcy. C. Your credit report does not have a FICO #. D. A FICO credit score is based off of your credit history, which is not part of your credit score. E. You may have to pay a fee to actually receive your score. F. Most credit history will only go back seven years, although a bankruptcy will stay on your report for ten years. G. You are entitled to a free credit report each year.

III. What Makes Up a Credit Score

A credit score takes into account a lot of different information from your credit report, but it’s not all treated equally. Some aspects of your credit history are more important than others and will weigh more heavily on your overall score. Your FICO score is essentially made up of the following:
 * Payment History – 35%
 * Total Amounts Owed – 30%
 * Length of Credit History – 15%
 * New Credit – 10%
 * Type of Credit in Use – 10%