FICO score is the credit score rating developed by FICO- Fair Isaac Corporation. It is a credit rating agency working in multiple countries including the UK, US, Russia, Germany and Australia. It specializes in “predictive analytics”; the agency analyzes the information to predict the future financial developments. FICO credit score analyzes all the vital credit information to fix a credit score rating of borrowers that helps the lenders judge consumer’s behaviour after borrowing. The detail report indicates the repayment ability based on the previous trends. As the lenders in the UK don’t use any universal scorecard, the credit scores generated by different credit reference agencies like Callcredit, Equifax and Experian etc is treated individually.
FICO Score Range:
There are dozens of slabs of FICO score; each version serves a different purpose. Generally, FICO score ranges in between 300 to 850. Like the credit score range of other agencies, here too the higher score indicates less risk to the lender. The standard FICO score stands around 760 that is more likely to get a better-priced deal.
Constituents of FICO Score Rating:
FICO score contains five main constituents. Each has different significance in credit score.
- Payment history – 35%
- Debt amounts owed – 30%
- Credit history age – 15%
- Credit inquiries – 10%
- A mix of credit accounts – 10%
All the above factors are evaluated in other credit rating models also, so, if you have a good FICO score, you will have a strong score calculated by other agencies also. However, the weight of each category varies in different types of loans. It is not good to hang up on a specific credit score number; instead, you should focus on what the areas of a credit report are strong and which areas need improvement. Although FICO report contains detailed information of borrower’s financial history it doesn’t contain too personal information like race, religion, gender, marital status, age, national origin, address, employment information, soft inquiries, interest rates on debts etc. FICO score is not just for the individuals but it is for small business owners also.
How to Get FICO Score Free:
The myFICO.com is the official website for getting FICO score. Generally, you are required to pay $19.95 per credit report request but you can get FICO rating free. FICO has created more over 50 different scoring algorithms but just a few are used by lenders. Your credit rating varies whether the credit report is assessed by an auto lender, mortgage broker, credit union or direct lender. Paying a fee just to know approval chances of loan application doesn’t make any sense.
The following tricks may help you get ‘FICO Score 8’ free as the most of lenders use it.
- Inquire for pre-approved credit card offers you receive. Once you are pre-approved, ask for full disclosure. The pre-approved credit brings the advantage of getting full disclosure. The credit card agencies give you detailed disclosure. Even if you qualify, they will still tell you the FICO score they rated. It is because your credit rating plays a vital role in interest rate fixing.
- Applying for a student loan may also help you get FICO score free. Just the application qualifies you to get free FICO score.
- Apply for ‘free credit score’ credit card. Not all the companies facilitate for free FICO score but you will the few doing so.
- Taking advantage of rejection for a credit card or loan may also serve your purpose. If your application is rejected, ask for disclosure.
- Grab the ‘free trial offer’ by the agencies providing credit monitoring and identity theft protection services. The free trial period is offered for a short-term to make you sure that the service is helpful for you.
- Using myFICO’s ‘Free Credit Score Estimator’ is good practice to have a fair enough idea about the existing credit rating. Although it is an estimating tool, still, the results are very close to accurate debt score.
Never pay to know the FICO score. The specific credit score rating assessed by numbers prospective lenders might not be same; and also, the number itself doesn’t end the prospects of borrowing. Relying on the reported credit rating by different lenders is the best way to have far idea about FICO score.
FICO score is most used in US continent while in England, Scotland, Wales, and Northern Ireland, Equifax, Experian and CallCredit are the most used certified rating resources. Having FICO score is good for the US people living in the UK and applying for financial assistance at UK Govt.’s department. Experian and Equifax credit rating agencies are active in the US and UK both but the credit score becomes irrelevant at overseas at least for the private lending agencies.