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Someone's Got Your Number... Do You?
Submitted by: Sharon Cabeen, Vice President of Financial Literacy, NSLP
When I was a little girl in the 1960's, I remember that my mother would send me to Mickey Froelich's corner grocery store for bread, milk or some other item. I'd grab my stuff, run past Mickey at the front cash register, and he'd say "Good to see you again! Tell your mom to pay me when she can!"
Those were still days when those who "granted" credit often did so based on knowing people in the community and how they typically paid their bills. My mother could walk into our local Sears store, her credit union, bank, or even the corner store and instantly be recognized as someone who could be counted on to pay her bills on time.
But then creditors began to expand their reach through the advent of credit cards and started moving what used to be local branches to regional and/or national offices. The days of knowing each and every customer were gone, and creditors needed a way to track how consumers were paying their bills. That's when the Fair Isaac Corporation created what is now known as the FICO Score.
According to www.myfico.com, "...myFICO is the consumer division of Fair Isaac, the company that invented the FICO credit risk score that lenders use. Starting in the 1960s, Fair Isaac sparked a revolution by pioneering credit risk scoring for the financial services industry. This new approach to lending enabled financial institutions to improve their business performance and expand consumers' access to credit. Today Fair Isaac's FICO score is widely recognized as the industry standard for lenders."
So much for history! Today it is critical that you become a smart consumer and understand what will make your FICO score attractive to creditors. Here are some tips for improving your FICO score:
For more information, go to www.myfico.com.