New Credit Score Formula for 2008

Credit scores are determined using formulas designed to predict how likely a consumer will pay his or her bills. Fair Isaac is the leader having created the FICO credit-scoring formula. Fair Isaac has announced its formula will be revised this year. The new formula will deemphasize the effect of one late payment on your credit score on an otherwise unblemished record. Fair Isaac states the company’s analysts pulled reports of 5 million consumers to see how their credit profiles fared over time. More information may be found in a recent issue of SmartMoney magazine.


Deceptive “Free” Credit Reports to Avoid

Consumers Union has released a report on the “free” credit reports available on the Internet that are not really free. The study looked at 24 sites were consumers are enticed to obtain free credit reports but only if they agree to pay for their credit scores and other services at the same time. Some sites offer free credit reports and free credit scores, but only if the consumer signs up for a credit monitoring service. Almost all the sites discouraged consumers from going to, which is the one site where consumers may, once a year, get a free credit...


Improving Your Credit Score: Four Myths Consumers Should Ignore

How do consumers get the best deal on credit? Most people know that furnishers–the lenders that supply credit–look at consumers’ FICO scores. The higher the score, the better deal the consumer will get. That means a lower mortgage rate or a more favorable interest rate on a new car. But how can consumers increase their credit score? A recent article debunks some of the more common myths about how consumers’ credit scores can be affected. 1)Closing Accounts Do Not Help Your Credit Score! Credit scoring formulas look at the difference between consumers’ available credit and what they are using. So,...


Consumer Credit: Five Reasons to Have a Good Credit Score

Your credit score basically predicts the possibility that you won’t pay your bills. Creditors figure that the higher your credit score, the less likely you are to miss payments. Most credit scores on based on the Fair, Isaac & Co. model, known as FICO scores. But why is your credit score important? A recent article by Kiplinger’s Personal Finance Magazine explains who relies on that score: 1) Lenders. Most people would expect lenders to look at their credit scores, and indeed they do. Your credit score affects the rate you pay on your mortgage, your car loan and your credit...

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