Universidad Tecnológica de El Salvador
Your Credit Score
Book

Your Credit Score

How to Fix, Improve, and Protect the 3-Digit Number that Shapes Your Financial Future

Liz Pulliam Weston
FT Prentice Hall, 2007
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You literally can’t afford to ignore your credit record. Every negative mark or mistake on your credit history can cost you big bucks: Over the course of a lifetime, a person with merely average credit will pay thousands more for a mortgage, car loan or credit cards than one with good credit. However, if you don’t know the difference between FICO and FICA, can’t understand why you have a 23.5% interest rate on your charge card, and were shocked when your car insurance payments went up even though you weren’t in an accident, don’t despair. Liz Pulliam Weston explains it all to you. Her book is brimming with accessible, vital information, and getAbstract believes that it will save you money, whether you’re just beginning to learn about personal credit or you’re an experienced, savvy consumer. And for that she deserves a lot of credit.

Summary

What’s the Score?

Until recently, most consumers had never seen their credit scores. They knew the scores existed, of course, because every mortgage lender, department store and credit card company uses the three-digit number to approve or deny applications. But the mathematical formula that engineer Bill Fair and mathematician Earl Isaac developed in the 1950s to predict creditworthiness was a well-guarded secret. That all changed in 2000, when the Fair Isaac Credit Organization (FICO), under consumer and legislative pressure, revealed which factors it used to determine credit scores. Now all Americans, under the Fair Credit Reporting Act, can access their credit reports and scores from the three major credit bureaus – Experian, TransUnion and Equifax.

Your credit score tells lenders how likely you are to honor your debts. They use it to determine whether to loan you money and what percentage rate they’ll charge you in interest. FICO scores range from 300 to 850, and more than half of the U.S. population has a score of 700 or higher. Borrowers who score at least 720 receive favorable interest rates, and lenders consider anyone who scores below 600 a high risk.

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About the Author

Liz Pulliam Weston is a personal finance specialist who writes a nationally syndicated newspaper column. She appears regularly on TV and radio.

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