Do you know what your FICO score is? If you don’t you’re missing knowledge around one of the key elements of how the credit agencies (and others) measure your financial health and credit worthiness. According to Wikipedia the definition is FICO is

FICO is an acronym for Fair Isaac Corporation (traded publicly under the symbol FIC) and refers to the best-known credit score model in the United States, which is calculated using mathematical formula developed by this company. The FICO score is primarily used in the consumer banking and credit industry. Banks and other institutions that use scores as a factor in their lending decisions may deny credit, charge higher interest rates or require more extensive income and asset verification if the applicants credit score is low.

FICO scores are designed to indicate the likelihood of a borrower being delinquent within the next 24 months.


It goes on to explain the many different components that make up the FICO score. They include items such as:

  • punctuality of payment
  • ratio of total revolving credit debt to total revolving credit available
  • length of credit history
  • types of credit currently used
  • recent searches on your credit history

As you can see, all the money basics come into play here — Not having too much debt, paying your bills on time over the long haul, and not having too many credit accounts open at one time.

What does the score mean?

A FICO score generally ranges from 300 to 850. It exhibits a left-skewed distribution with a US median around 725. 660 is generally regarded as potentially subprime and represents an important break point for credit worthiness.

The higher your score, the better. While this may put those of you with bad memories of SAT and standardized tests into a heavy sweat, don’t panic. It isn’t a “test”, but simply a measure of your financial situation against a set of standards while allowing lenders to do a quick comparison of your situation to that of others.

Take Control

It is your responsibility to know your credit history and financial situation. This is not a time to bury your head in the sand. And, after the Fair and Accurate Credit Transactions Act passed you can now request your credit report once every 12 months for free from Annual Credit Report.com. This free report includes information from all three major credit reporting agencies (Equifax, Experian and TransUnion) but it does not include your FICO score. It is a nominal fee ($7.95 as of September 2006) to obtain your credit score as part of your report.

I recently obtained my annual free credit report and all is well. I find this an important step in keeping tabs on what the credit report contains. It is very important to review the report and notice any accounts or details that are inaccurate. There is a formal dispute policy if you find errors. It is worth following through because remember — your credit report determines what type of interest rates you are offered for loans and whether or not you are even eligible for a loan. Savvy money managers know the bottom line impact even a slightly larger interest rate can have on your overall financial plan.

So, why wait — hope on over to Annual Credit Report and grab yours today. Then, make a note on your calendar to remind you 12 months from today that it’s time to request it again.

Before I close, I just want to say that I’m honored to write my first article as a Queercents contributor and look forward to sharing inspiration, resources, tips, and opinions on the topics of career and finances in the weeks and months to come. If you want to learn more about me, you can click over to the Queercents “About” section, or visit my blog at http://www.coaching4lesbians.com or my website at http://www.thepaulagcompany.com .