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The scores that count in mortgage lending

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So you consider yourself a well-informed consumer. You have been educating yourself about credit scores, the credit process and how lenders evaluate credit for mortgage loan applications as you are getting ready to purchase a new home. And you already know that understanding your FICO Scores is really important as they are the credit scores most commonly used in the mortgage loan review process.   You’ve pulled your FICO® Scores and credit reports at myFICO to see where you stand, but are not sure on which FICO Score versions you should focus.  Do mortgage lenders use FICO® Score 8 from all three credit bureaus? Or FICO Score 8 from one and FICO® Score 5 from another? I know, it can be kind of confusing.   Let me explain …   When you access your credit … [Read more...]

Interactive credit score map:
Median FICO Score 8 by state

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In the name of Financial Literacy Month, we had a little fun with some FICO Score data! While where you live is not considered in the calculation of your FICO® Scores, it's still interesting to compare FICO Score trends across the 50 states.   The median FICO® Score 8 for the entire U.S. is 713 as of October 2014 (median score means the point where 50% of the population scores above and below that score). Can you guess which states had the highest and lowest median FICO® Scores?   Check out the median FICO® Score 8 for your state on the map below and keep reading to find out which states ranked!       People in northern states in the midwest as well as New England states, on average, tend to have higher FICO® Scores – Minnesota and North … [Read more...]

New FICO credit education video series: Understanding your credit

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We’re excited to introduce a new education video series from FICO—Understanding Your Credit. We created these three initial short videos to help you understand FICO® Score basics. Watch them and learn what a FICO Score is, how it’s calculated from your credit reports, how lenders use them to evaluate your credit risk, and plenty more!   What is a FICO Score?   Every day, thousands of U.S. lenders use FICO Scores to make more well-informed credit-granting decisions. But what does that mean for you? And why is it important to understand how lenders use them?   This video takes a look at what a FICO Score is and why it matters to consumers and lenders alike. Watch to learn how FICO Scores streamline the lending process, making it faster and fairer for … [Read more...]

President Obama says credit scores are an “early warning system” for fraud. Is he right?

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On Jan 12th, in his lead-up to the 2015 State of the Union Address, President Obama gave a speech at the Federal Trade Commission outlining proposed legislation that would help “better protect American consumers from identity theft and ensure our privacy.”   In addition to previewing a new data breach notification law, which would require businesses to notify consumers of a breach within 30 days, the President lauded the recent efforts of several lenders who are offering free FICO® Scores to their customers.   He specifically thanked JPMorgan Chase, Bank of America, USAA, the State Employees’ Credit Union, and Ally Financial  for “stepping up and equipping Americans with another weapon against identity theft, and that’s access to their credit scores, free of … [Read more...]

These 4 credit scoring myths could be hurting your scores

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Some myths are innocuous. Thinking that the Great Wall of China is visible from space (it’s not) or that sharks don’t get cancer (they do) won’t have much of an impact on your life.   The same can’t be said, however, for some of the common misconceptions about credit scoring.  If you believe any of these 4 credit scoring myths, you could be doing damage to credit score without even knowing it.   1. “My poor score will haunt me forever” Believing this myth has the effect of a self-fulfilling prophecy. If you think that trying to rebuild your credit is futile, there’s little chance you’ll take the necessary steps to start down the path toward a higher score.   The truth is, even something as devastating to your score as a foreclosure can be rebounded from … [Read more...]

4 Surprising things
that cause a hard inquiry

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When you’re focusing on improving your credit, every bit of credit activity is crucial. You’ve been tirelessly working to pay off debt and manage your credit responsibly. The last thing you need is for a hard inquiry to hit your credit report and potentially impact your FICO® Scores.   What’s an inquiry? Inquiries occur when someone checks, or inquires about, your credit. They are often also called credit checks. There are two categories of credit inquiries—one that your FICO Scores consider and one that your FICO Scores don’t consider.   A “hard” inquiry occurs when you authorize a lender or other entity to view your credit reports and FICO Scores.  Since you authorized this inquiry, it’s often called a “hard” inquiry. Hard inquires can impact your FICO Scores as … [Read more...]

Why credit scores matter

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When you apply for a loan, you’re probably thinking about your brand new house or car. When you apply for credit, you’re probably thinking about what you’re going to purchase. Maybe, just maybe, you’re thinking about your monthly payments. What you’re probably not thinking about is your FICO® Scores. But your lender most likely is.   The loan process often has multiple steps, and only a few seconds on the radar is the part where you agree to a credit check. But that’s a very important step! In fact that little step could have a substantial impact on your monthly payment.   90% of top U.S. lenders use FICO Scores when making lending decisions, and your scores can have a substantial impact on your loans. Here are a few reasons why your FICO Scores … [Read more...]

FICO, President Obama and the future of consumer protection

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  Friday morning was a momentous day for FICO—and for American consumers. President Obama arrived at the Consumer Financial Protection Bureau on Friday to sign an executive order to improve consumer protection and identity theft prevention. The initiative is called the BuySecure program.   FICO was an active participant in this event, and we are honored to be able to contribute to the program.   Millions of Americans have fallen victim to data breaches in the last year as a result of weak security systems. Because of this, the President has decided to take action. Before signing the executive order, President Obama explained, “we've all experienced the benefits of new technologies that let us buy and sell things faster and more efficiently than ever before. … [Read more...]

Understanding how lenders
use credit scores

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You already know that most of the top lenders (90% of them) use FICO® Scores (the top name in credit scores) when making lending decisions (probably because we’re always telling you about it). But what does that actually mean? What really goes down when you apply for a loan? Whether it’s an automated approval process or a 60-day mortgage close, a lender is doing a lot to figure out if you’re going to pay them back on time or not. Here are a few things that might help you understand the approval process.   FICO Scores are designed to help evaluate your risk FICO® Scores aren’t just an arbitrary number provided on a whim. They are based on complex, mathematical algorithms that statistically evaluate a consumer’s credit risk with a point system. Points are assigned for … [Read more...]

Introducing industry-first technology from myFICO

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We have a huge announcement to make. Actually, make that four huge announcements. When we introduce new technology and features, we really like to make a splash.   We’ve listened to your requests, complaints, suggestions and praise and developed three new products that we think you’re going to love. In fact, we’re leveraging technology that’s never before been available to consumers. So without further ado, allow me to introduce three new products and more from myFICO.   FICO® 3-Bureau Credit Monitoring For the first time ever and exclusively at myFICO, you can now monitor three FICO® Score — one from each credit bureau — and monitor all three of your credit reports. This intelligent new product will help you get a better understanding of your full credit picture. … [Read more...]

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