FICO, also known as your credit score, or your Beacon score, is the way you are perceived in the financial community. It is a measure of how you pay your bills, what you owe, what you have available to you credit wise, etc. Before you get any sort of loan or credit card, anything really, your credit report will be checked and you will be issued a FICO score based on the information contained in your credit report.
The lower your score, the higher the interest rate you will pay. Conversely, the higher the score, the better the rate you will get when applying. Your score is a snapshot of your credit history for the past 7 to 10 years, depending on the items on your credit. If you declare bankruptcy, it could take up to 10 years to have it removed from your credit. Most credit card items will fall off after 7 years.
If you apply for credit quite often, your credit score will get checked each time you apply. This will bring down your credit score as well, for the more hits you have on your credit, the more it looks like you are trying to get a large amount of credit available to you, which is not a positive thing. Employers can check your credit to see if you are a liability to the company. Landlords can check it to see if you are likely to pay your rent on time. ■
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