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Credit Score
Statistical Data
Introduction
Are you looking at buying
car or a new house? Have you applied for a credit card? Insurance?
A job? The one factor that could affect them all your credit
score. This three-digit number between 300 and 900 will indicate
your risk level to potential creditors, insurers, and employers.
Understanding Your Credit History and Your
Credit Score
Your credit history determines
your final number. This system, invented by Fair Isaac Corporation
for the three major credit bureaus—Equifax, TransUnion,
and Experian—is based on types of credit you’ve
had and how long, your payment history, and if you have had
any late payments, as well as the status of any current loans
or lines of credit.
The Significant Impact of Your Credit Score
Your credit score, in addition
to affecting your ability to get loans, insurance, future
credit, and even jobs, is also part of a statistical model
of the state, country, and region in which you live. This
can affect how you are perceived in relation to other loan
applicants. For instance, the median (which means
half the people surveyed were higher than this score and half
were lower) nationwide FICO score is around 723. Someone with
that score applying for a loan will fare well, but the further
you get below that mark, the more costly the loan will become—if
you even get it. People with scores around 600 have been known
to get loans, but it costs them dearly. |
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Your Credit
Score and Your Money
What does this mean in terms
of money? That someone with a credit score less than 620 will
pay around $86,000 more in interest (30 year fixed rate mortgage
of $200,000) than the person with excellent credit scores,
according to www.myfico.com. This also translates into higher
risk for insurance companies—the lower the credit rating,
the higher the risk of claims, according to some statistical
models.
General Credit Score Statistics
The general breakdown of
the credit score bell curve and the corresponding total delinquency
rate (for each subsection of scores) looks something like
this: |
| Score |
Percentage of Population |
Delinquency Rate |
| 300-499 |
1 |
87% |
| 500-549 |
5 |
71% |
| 550-599 |
7 |
51% |
| 600-649 |
11 |
31% |
| 650-699 |
16 |
15% |
| 700-749 |
20 |
5% |
| 749-799 |
29 |
2% |
| 800 and higher |
11 |
1% |
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Your Credit
Score and Your Future
Because the scores determine
much about what happens to your financial life, you can see
it pays to keep your score at 700 and higher, and above the
national median of 723 if possible. Although som say it’s
as hard to keep a good credit
score as it is to get credit to begin with, it really isn’t—pay
your bills on time, pay off your credit card every month,
and never go over your limits. |
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| Home |
| Credit Score Basics |
| FICO Scores |
| Key Factors |
| Improving Credit Score |
| Checking Credit Score |
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 Latest
News
7/15/10
Figures provided by FICO Inc. show that 25.5 percent
of consumers — nearly 43.4 million people — now have a credit
score of 599 or below, marking them as poor risks for lenders. It's unlikely
they will be able to get credit cards, auto loans or mortgages under the
tighter lending standards banks now use.
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7/17/09
A Home Loan Modification could affect your credit score
depending on how far behind you are and the kind of mortgage loan modification
you’ll be granted.
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7/8/09
In this recession, many consumers find their credit
as the credit crunch continue to take its toll. Banks and credit-card
companies hit by charge-offs are tightening up their lending standards.
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6/15/09
As the recession drags on, more people find their all-important
credit scores slipping. Here are some suggestions what you can do about
it
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6/10/09
Fair Isaac Corp., maker of the popular FICO credit
score, is rolling out its new-and-improved scoring model, dubbed FICO
08, with Equifax.
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5/19/09
Recently, many consumers have experienced their credit
card company decreased their credit line. Card issuers are tightening
the screws on consumers
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