Credit Research News - March, 2005

Cleaning up your credit

There is a lot going on right now that could affect your credit. You could be one of the nearly 150,000 ChoicePoint victims whose identities were stolen. Or maybe you're deep in dept. And new legislation being debated on Capital Hill today could tighten the rules for personal bankruptcy -- eliminating your way out of debt. That in turn can worsen your credit.

Consumer credit scores: Clearing up the confusion

Equifax and Fair Isaac teamed up to provide consumers with their FICO credit scores. The other two credit bureaus, TransUnion and Experian, decided instead to sell to consumers a score that was similar — but not the real McCoy — to the FICO score. 'The confusion and irritation of (consumers) is understandable,' said Craig Watts, public affairs manager for Fair Isaac. 'It could be avoided if Experian, TransUnion and their various consumer Web sites would only be upfront to consumers about the nature of the consumer scores they sell — they aren't FICO scores, they aren't widely used (if used at all) by lenders. They are at best someone's estimate of what the consumer's true FICO score is.'

Credit Card Companies and Fair Isaac team up on credit score education.

Credit scores are one of the leading factors creditors use in making lending decisions. FICO credit scores range from 300 to 850 and are calculated from a host of criteria from consumer credit reports that can be broken down into five categories: a consumer's payment history, amounts owed, length of credit history, new credit applied for or taken out, and types of credit used.

8 consumer credit score myths

If your credit score is 580, for example, you are likely to pay nearly three percentage points more in mortgage interest than someone with a score of 720. To put it another way, the payments on a $150,000 30-year fixed-rate mortgage would be about $890 if you qualify for the best rate, according to Fair Isaac, the company that created the FICO score. That same loan could cost more than $1,200 a month if your credit is poor.