Fair Isaac Corporation is the creator of the FICO
credit score that is used today by most lenders to
evaluate consumer credit risk. FICO scores range
from a poor credit low of 500 to a best credit rating
The higher the FICO score the lower the interest rates
offered by most lenders. For example here is a look
at how FICO scores might affect a $150,000 30-year,
fixed rate loan:
Score Interest Payment
720-850 5.64% $865
700-719 5.77% $877
675-699 6.30% $929
620-674 7.45% $1,044
560-619 8.53% $1,157
500-559 9.29% $1,238
Rates change frequently, but you can check the daily
average at myfico.com.
Fair Isaac has extended its FICO score to cover an
expanded population base. This expanded FICO coverage
will tap into non-traditional sources of consumer data
to assess the credit risk of adults who have minimal
or no credit history on file - such as recent
immigrants, people with low incomes, recent widows
and divorcees, and young people.
The company has tapped into non conventional ways of
establishing credit scores. People pay rent, they
pay catalog companies when they order something,
they pay back payday loans -- there are various ways
people show financial responsibility and Fair Isaac
will now be gathering that information to help
determine FICO scores.
An estimated 160 million Americans have documented
credit histories adequate for calculating classic
FICO credit scores. An estimated 50 million
consumers do not. Now that will change.
For real estate investors and landlords this means
that we should be able to find a few more credit
worthy buyers and renters than in the past.
About The Author
Mark Walters is an investor and author. You can find his
published material at http://www.CashFlowInstitute.com