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Got a question about FICO? Here are a few answers that should help make your credit score less of a mystery.
Have a question that didn't make our list, but should? Let us know by writing to us at info@baycities.org. We'll not only write back promptly, we'll also consider your question as one of the most frequently asked.
Frequently Asked Questions:
What is a FICO?
Also known as your credit score, your FICO is a number used by lenders to approve a loan, and, if approved, set the interest rate.
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Does Bay Cities Credit Union control my score?
Not at all. Your score is controlled by how you handle your credit.
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Where can I get my FICO score?
You can find out your FICO score if you’re applying for credit with Bay Cities Credit Union. Most likely we will discuss it with you when you apply because of our ScoreBuilder™ Program.
Through a new federal regulation, you can get one free credit report a year from the three major bureaus. Click here for more information.
You can also obtain your FICO score at the following sites:
You can order as many of your reports as you wish from these sites. When you do, it is not counted as an inquiry, and it doesn’t affect your score.
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Why do lenders use credit scores?
Lenders use credit scores (FICO) to make fast and fair decisions on loan requests. Credit scores are empirically derived and statistically sound predictors of possible payment or full default on a loan. They are also non-discriminatory because they do not take into account race, national origin, religion, gender or marital status.
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How can my credit score help me?
If you have an excellent credit score, you will be able to obtain loans faster and, most likely, at a lower interest than if you had a lower FICO score.
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What is a low score?
FICO scores run from 300 to 850. The higher your FICO, the better.
Lenders generally break FICOs into ranges that qualify for a certain interest rate. Here is an example of a possible range chart.
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FICO Range
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Grade Definition
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Sample Interest Rate
on a $20,000 Car Loan
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730 and above
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A+
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4.5%
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680 - 729
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A
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5.0%
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640 - 679
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B
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6.0%
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600 - 639
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C
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11.0%
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550 - 599
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D
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15.0%
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549 and less
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E
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18.0%
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These rates do not necessarily represent current rates offered by Bay Cities Credit Union.
For the purposes of this question, a “low” score could be seen as 639 or less because that score carries the most impact when it comes to interest rates. A grade of C gets an interest rate of 11% in this example, while a B gets 6%, and an A gets 5%.
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What brings a score down?
Any of the following can lower your FICO score:
- Missing payments
- "Maxing out" your credit cards
- Opening too many accounts too quickly
- Closing your oldest account
- Having too much revolving credit in relation to installment credit
- Having too many finance company accounts
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How fast can my score change?
Your FICO can change whenever new information is provided to the credit bureaus. Your score is not likely to move dramatically from one month to the next unless something substantial happens such as a bankruptcy or late payments. According to Fair Isaac Company, only about one in four people experience a 20-point change in their credit score in any three-month period.
Late payments and other derogatory information can lower your score quickly. Once that happens it could take at least six months to rebuild your score.
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What should I do to increase my score?
The basic advice is to make your current payments on time, reduce your credit card balances if you’ve maxed out your cards, don’t close your oldest account, don’t close any revolving accounts or credit cards, and allow some time to pass. You can also enroll in the ScoreBuilder™ Program.
You should know that there are no miracle fixes to a low score or a credit report that may have negative items on it. You will have to work at increasing your score and then manage your score over time to protect it.
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If I check my own score through the Internet does that lower the score?
No. You can make unlimited inquiries about your own credit via the Internet
with absolutely no affect on your FICO.
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I obtained my report from the Internet and it didn’t have a FICO. What is
wrong?
Check with the company you ordered the report from and make sure it should have included a credit score; some companies offer reports that only show your history.
If your report says that there is insufficient information to calculate a score, then you may not have enough credit history yet. Try again after you have had one account that has been open at least six months.
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