What is FICO ?

Question

What is FICO score? I know there's equifax, Experian and TransUnion (my credit score is 678 and my FICO score is 662.).. But what is FICO score? Is that relate to auto loan ?

Answer 1

Here is some info I stole from: http://www.expert-credit-advice.com/


For a three-digit number, your credit score packs a big wallop. A low score can thrust you into the financial abyss of the sub-prime market, costing you thousands of dollars in added interest over the life of a car loan or mortgage. Consumers who have a very low score or no score at all; may not get credit on any terms. A quick glance at this single bit of information gives creditors all they feel they need to make judgments about whether you will repay a car loan, mortgage or credit card debt. Your score is a snapshot of your credit report, giving creditors instant clues about how you pay your bills, how you've handled credit over the years and even whether financial troubles have led you into the courts.

Born as a mortgage underwriting tool in the mid 1990s, credit scores are now commonly used by all lenders. Your credit report and/or your credit score may also be seen by employers, landlords, or cell phone and utility companies. In short, a credit score is a grading system that adds or subtracts points based on select data in your credit report. Late payments, maxed out credit cards, and bankruptcies are negative factors that take points away. A solid payment history and prudent use of available credit add points. Your final grade, your credit score, is said to measure how likely it is that you will repay a loan.

What are the different
TYPES OF scoring models & CREDIT SCORES

Minnesota based Fair Isaac and Company, (F.I.C.O.) was the first company to develop a credit scoring model based on selected criteria included in credit reports. In the 1990s the mortgage industry started to use scoring models to automatically rate consumers. In these early years credit scoring was largely a mystery to consumers.
Today credit scoring has moved far beyond the mortgage industry and is used by nearly all lenders to make instant decisions about the odds a loan will be repaid. Scoring models developed by Fair Isaac, which have come to be known simply as your FICO, continue to dominate the credit scoring market. Fair Isaac licensed it scoring software to all three national credit bureaus. Then each bureau adopted its own version of the Fair Isaac model. Different scoring factors coupled with different data in each bureau's credit files can lead to wide disparity in scores. In March 2006 it was announced that a new score called the Vantage Score will be used more and more until eventually it will take over the well known FICO Scoring Model.
FICO scores range of 300 to 850 and Vantage scores range from 500 to 990.
In addition to FICO scores and the new Vantage Scores, many companies have developed scoring models. Experian, for example, estimates there may be up to 1,000 different scoring models, each with a different scoring range. Some models focus on specific types of loans like automobile loans or credit cards.
Currently there is what the Federal Trade Commission characterizes as an “extensive and dynamic market for credit score products.” Very often credit scores come bundled with offers to sell other products such as credit reports, credit report monitoring services or identity theft insurance.

In recent years, it has become the industry norm, although not required by federal law, to allow consumers to purchase credit scores or get free scores when applying for a mortgage. Scores may also now be available through companies with which you have an existing relation. For example, some credit card companies offer a free score along with your monthly statement. Under recent amendments to the FCRA, consumers nationwide are entitled to purchase a credit score for a “reasonable” fee. But, again, the FCRA only applies to “educational” scores that show you how scoring works and how you rate as a credit risk.
For the time being, you should look for your F.I.C.O. score as the score to be used by most lenders. Keep in mind, to add to the confusion; the 3 major credit bureaus have different names for your FICO score. Experian calls it a “Beacon Score. Equifax has labeled their score the “Fair Isaac Risk Model” and Trans-Union markets their score the “Empirica” score.



How is it calculated?

Here is the breakdown:

Payment History

* Account payment information on specific types of accounts (credit cards, retail
accounts, installment loans, finance company accounts, mortgage, etc.)

* Presence of adverse public records (bankruptcy, judgments, suits, liens, wage
attachments, etc.), collection items, and/or delinquency (past due items)

* Severity of delinquency (how long past due)

* Amount past due on delinquent accounts or collection items

* Time since (recency of) past due items (delinquency), adverse public records (if
any), or collection items (if any)

* Number of past due items on file

* Number of accounts paid as agreed

Amounts Owed

* Amount owing on accounts

* Amount owing on specific types of accounts

* Lack of a specific type of balance, in some cases

* Number of accounts with balances

*Proportion of credit lines used (proportion of balances to total credit limits on certain
types of revolving accounts)

* Proportion of installment loan amounts still owing (proportion of balance to original loan
amount on certain types of installment loans)

Length of Credit History

* Time since accounts opened

* Time since accounts opened, by specific type of account

* Time since account activity

New Credit

* Number of recently opened accounts, and proportion of accounts that are
recently opened, by type of account

* Number of recent credit inquiries & Time since credit inquiries

* Time since recent account opening (s), & opening (s) by type of account

* Re-establishment of positive credit history following past problems

Types of Credit Used

Number of (presence, prevalence, and recent information on) various types of accounts (credit cards, retail accounts, installment loans, mortgage, consumer finance accounts, etc.)

Answer 2

FICO stands for Fair & Isaac, Co. That is a company that produces the credit score for Credit reporting agencies; they use a formula that calculates all the information contained on a credit report. The score range is 300-850; the average score is 720-750. When you apply for credit, the company usually bases whether you will be granted credit, as well as your interest rate, on the FICO score.

Answer 3

WAYNE YOU HAVE A PRETTY GOOD SCORE.