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Credit Questions
What is a credit score and what is it designed to do?
- "The FICO score is the single best summary score of one's credit worthiness," says E-Loan President and Chief Operating Officer Joe Kennedy.
- A credit score number is often called a FICO score, for Fair Isaac Corp., the California company that developed the system upon which it is based.
- The score is supposed to distill all the information in your credit report, using a formula to calculate a single number that indicates your credit worthiness.
- It's designed to give lenders a fast, accurate prediction of the risk involved in giving you a loan. Lenders have attested to the score's value in streamlining the underwriting process and creating more opportunities for consumers to get mortgages.
- Scores range from the 300s to about 900, with the vast majority of folks falling in the 600s and 700s. The higher the score, the better.
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