If you are thinking about opening a new credit account anywhere, it is essential that you know your FICO or credit score. This is the number between 300 and 850, that decides how good a rate you are going to get. The higher the number, the better the rate you will get. To get the best rates, you usually should have a score about 750. According to FICO, the median credit score is 723.
Each individual actually has three credit scores for FICO because each of the national bureaus, Experian, Equifax, and Transunion, all maintain separate databases. When credit card companies or others look at your scores, the usually take the middle score or average the three scores. Each score is calculated based on credit history, amount of credit, and any issues such as late payments or overdrafted accounts. The weight of each is unknown as the model is proprietary, but being late is known to cause 100 point decreases in scores.
I have found this great tool for individuals to estimate their FICO scores. It is a Free Credit Score from all three bureaus plus Complete Identity Protection – TrustedID, free for 14 days. Check it out! It is better to know than to be surprised when you don’t get the best rate.
- The College Investor
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