For the average consumer, there are many mysteries surrounding credit scores. What is a FICO score? Is it really necessary to monitor this metric on a daily basis, as some personal finance counselors suggest? Will a better FICO score make me a better person?
Good questions all. A FICO score is a type of credit score created by the Fair Isaac Corp. Lenders use it, and other scores like it, to assess whether it’s a good idea to lend you money. A good credit score entitles you to better interest rates, since you’re a lower risk, thus potentially saving you hundreds or thousands of dollars when buying a house or car.
A decade or so back your credit score was something you sometimes had to pay to access, usually from one of the three big companies that generated credit scores. The information is now much more available, and it pays to know your score, particularly if you’re in the market for a big purchase. They should also be checked periodically to make sure of their accuracy.
About 100 attendees picked up these tips and others in May when FICO brought its Score a Better Future event to the University of Alabama at Birmingham Collat School of Business. The credit education event featured a 45-minute interactive FICO Score education program followed by individual credit counseling sessions for any attendee who registered. More than 40 individuals opted for individual counseling.
U.S. Sen. Doug Jones, D-Alabama, delivered opening remarks at the event. Jones is a member of the Senate Banking Committee, which has jurisdiction over credit score/credit reporting issues.
For the traveling show, FICO uses participants in the FICO Score Open Access Credit and Financial Counseling program, such as Operation Hope, National Urban League and Gateway Family Solutions, as part of this financial inclusion initiative. Future events are being scheduled in Washington, DC, and Charleston, SC, along with several other cities.
While good credit doesn’t necessarily equate to a good soul, it does offer food for thought. As one attendee says, “It made me realize the factors that are contributing to my debt and my personal decisions that impact my credit score.”
