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Fair Isaac and Company (FICO), is a data analytics company based in Boseman, Montana. It is focused on credit scoring services. It was founded by Bill Fair and Earl Isaac in 1956. Its FICO score, a measure of consumer credit risk has become a fixture of consumer lending in the United States.
A FICO score is a number used to determine someone's creditworthiness. Financial Institutions and Lenders use this as a guide to determine how much credit they can lend to a borrower and at what Interest rate. FICO score can range between 300 and 850, the higher the number, the better and you are deemed to be a better credit risk.
For a Home Mortgage, the commonly used FICO scores are
(1) FICO Score 2, or Experian Fair Isaac Model v2
(2) Fico Score 5, or Equifax Beacon 5
(3) FICO Score 4, or Transunion FICO Risk Score 04
It is always a good idea to review your credit report before you apply for a home loan to check for any incorrect information. Lenders look at your credit score as part of evaluating your loan application before a loan offer is made.
Under the Fair Credit Reporting Act, you are entitled to one free copy of your credit report annually. One way of obtaining your free credit report is by accessing the website www.AnnualCreditReport.com
About the Author: Ahsan Bashir is an experienced Tax Consultant based in Irving, Texas, with over 25 years of expertise spanning Taxation, Accounting, Business Lending and Mortgage, Risk Management, Business Insurance, and Business Consulting. Through his firm, Z-Tax & Accounting, he provides comprehensive financial services including Individual and Business Tax Preparation, Bookkeeping, Payroll Processing, and Business Consulting. As an Enrolled Agent authorized to practice before the Internal Revenue Service (IRS), and an IRS Certifying Acceptance Agent (CAA), Ahsan Bashir delivers trusted, professional solutions tailored to the unique needs of both individuals and businesses.
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Related Topics: What are the Credit score evaluation methods • FTC Red Flag rules, 16 CFR Part 681 ? What Information is included on a credit report? What Factors are used in determining a credit score? What is the Information included in a “consumer report” ? What is the Equal Credit Opportunity Act (ECOA), 12 CFR Part 1002 (Regulation B)?
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