The FICO score could be a three digit recipe for glee or dread depending on what you know about credit and how you use it.
The Fair Isaac Corporation, the company that tracks and tallies those scores, is holding a workshop in D.C. to help consumers boost their scores so they can harness their financial futures.
“The critical factor for consumers to be aware, is it’s used in over 90 percent of consumer lending decisions,” said Joanne Gaskin, FICO Vice President of Scores and Analytics. It also is used to determine whether or not a lender will extend credit, and how much they’ll charge you to borrow their money.
She and others at the company are working to help people understand more about the building blocks that compose the score.
“The FICO score is built on credit bureau data, so Equifax, Experian and TransUnion all collect data from banks that are furnishing the data,” Gaskin told WTOP. “We built an analytic model on that historical information, and then the three credit bureaus are responsible for distributing that score into the marketplace for lenders to use for credit decisions.”
The goal of Wednesday evening’s free workshops at the Kaiser Permanente Center for Total Health in Northeast D.C. is to help folks with questions about credit to “walk out with answers about how the FICO score works, what are the key ingredients,” said Gaskin.
Registration is required, and there is a waitlist. However, Gaskin said those who can’t make the workshop can consult the Score A Better Future website, which has educational materials meant to explain the FICO numbers.
A fledgling number today doesn’t mean it has to remain that way forever.
“The FICO score is dynamic,” Gaskin stressed. “The No. 1 ingredient in the score is historical payment information. So keep current and stay current [with payments] if you can.”
She also said credit utilization, or the amount of available credit that a consumer uses, is another component of the FICO score. Gaskin said keeping credit card lines paid down on a regular basis will also help improve the score.
View more videos access other free information about the FICO score and credit health at Score A Better Future.
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