Four Steps to Calculating Your Credit
Obtain your FICO score in minutes online

Your credit scores can determine your next big step in life. Whether applying for a home, car or business loan, your Fair Isaac and Co. Inc. (FICO) scores can make or break the deal.

While lenders look at a variety of information to determine whether or not you're approved for a loan, Fair Isaac is the most frequently used credit scoring system. Credit scores allow loans to be approved faster, make credit decisions fairer and can prevent small credit mistakes from reducing your eligibility for a loan.

It used to be bit of a process to get your FICO score, but now, you can log onto www.myfico.com to access your score.

It costs $12.95 and takes about 20 minutes. Your online steps are simple:

	Step 1: Register. Supply personal information (full name, address, etc) to begin a file locator.
	Step 2: Prove your identity. Answer a few questions about your credit information to verify your identity.
	Step 3: Create a profile. Save your file with a password so you can revisit your information later.
	Step 4: Pay. Select your payment method and follow the links to your credit score.

Your credit score is displayed along with explanations about the deciding factors for your score. The report includes a summary with tips on how to pay off high balances quickly or how to build a credit history.

Five factors determine your credit score. These are your payment history (35% of your score); the amount you owe (30% of your score); your credit history length (15%); how much new credit you've attained or applied for (10%); and the mix of credit you have (10% of your score).

FICO encourages individuals to pay bills on time, keep balances low and keep new credit applications to a minimum. Pay close attention to the FICO feedback along with your score. Financial experts also recommend reviewing your credit report (obtained through a credit agency such as Equifax) every year to check for errors.

Is Your Credit Report On Target?

Some believe scoring methods have an unequal impact on minority and low-income applicants  

Whether you're making a big purchase like a house or a new car, or a less ambitious transaction like applying for a credit card, your prospective lender always runs a credit report on you. But is everyone getting getting a fair shake when it comes to credit scoring?

Many call credit scoring a simple, objective way to determine one's ability to repay loans -- where race, nationality and income are not considered. Others, however, believe certain scoring systems have unequal impact on minority and low-income credit applicants, as these groups are more likely to use non-traditional forms of credit.

Your Score Is Just One Factor: The credit scoring system preferred by most lenders is produced by Fair, Isaac & Company Inc. The company's software lets lenders and credit bureaus generate a credit "score" based on a borrower's credit history. Known as FICO scores, these calculations play a significant role in obtaining mortgage loans.

Fair Isaac won't say exactly how FICO scores are tabulated, but the company does acknowledge which factors it uses for calculating its totals. In order from most to least important, they are: late and delinquent payments, bankruptcies, outstanding debt, length of credit history, new applications for credit, and types of credit in use. It is illegal to include ethnicity, religion, gender, marital status or nationality in determining credit scores.

If you're concerned about your credit history, you can order a copy of your credit report from one of the three main credit bureaus (Experian, Trans Union, and Equifax), see if there are errors and if so, correct them. You can also ask your lender for your credit score and provide your loan agent with explanations for late payments.

 

	Understand Your Credit: No matter what kind of loan you're applying for, lenders will want a copy of your credit report. You'll probably want to take a look yourself.
	What To Look For In Credit Reports: Consult this guide to understand what you will and won't see on your credit report.
	How to correct your report
	Credit questions and answers