All About Credit: You know that being trustworthy is an essential trait in your personal, academic, and professional life. But did you know it’s also an essential trait for living a financially healthy life? The extent to which a lender or creditor is willing to loan you money is based on their confidence that you can be trusted to pay back what you borrowed. In this case, the more you’re trusted, the more “creditworthy” you are. It’s important to understand how credit works and actions that can help you maintain a good credit reputation.
FICO Credit Score: In 1956, Bill Fair and Earl Isaac created a company to measure consumer credit risk. It came to be known as The Fair Isaac Corporation and was shortened to FICO. They created a measure of a three-digit score (which ranges from 300 to 850) to rate your financial performance in debt management. FICO measures your credit-worthiness and estimates your level of future credit risk, using predictive analytics based on your credit history. It also helps you assess the risk you pose when applying for loans or credit cards.