Glossary
FICO
FICO is a credit scoring model created by Fair Isaac & Co (hence FICO). FICO is often used as a general term for the family of credit scores that the three major credit bureaus provide. A credit score is a mathematical formula that tries to estimate whether a borrower will repay money or more accurately what the probability is of the borrower repaying the money.
The FICO formula is not publicly available. However, there are many experts that make educated guesses as to what will affect a FICO score.
The best advice to a consumer is to act rationally. Opening too many credit cards or loans at one time or falling behind on any bills can be signs of trouble. Consumers should not rely on agencies which claim to be able to "clean up" their credit. Many of these agencies simply try to dispute items on a credit bureau report.
2 Comments so far
[...] First the effect on your FICO score. A FICO score is a generic credit score. used to determine whether a borrower will pay back a loan. The latest research indicates that closing cards will NOT help your credit scores and may in fact harm them. A possible explanation is that a credit score is a compilation of your lending history, so closing cards with a long history may be hurt your score. [...]
[...] the system and reduce your chances of mistakes like this happening. Don't working about your FICO score. Who cares about that. You want to protect yourself from the hassles of identity fraud and/or [...]