Credit scores factor into the majority of lending decisions, including those for mortgage and rental applications. In most of these scenarios, lenders determine an applicant’s eligibility by weighing his or her FICO® Score.
FICO recently rolled out an enhanced version of their Score Simulator that helps prospective homebuyers and renters understand the impact their actions have on their credit scores. The tool simulates actual FICO Scores, allowing users to enter multi-action simulations and providing side-by-side comparisons with data from the three major credit bureaus.
The what-if simulations include over 20 distinct actions, such as:
• Forgetting to Pay a Bill
• Increasing a Credit Account Limit
• Maxing Out a Credit Card
• Paying Down a Credit Card Balance
• Refinancing a Mortgage
• Taking Out a Car Loan
“Because FICO Scores are used in more than 90 percent of U.S. lending decisions, consumers want to better understand how their actions might affect FICO Scores," says Geoff Smith, vice president of Consumer Scores at FICO. “The newly enhanced FICO Score Simulator enables consumers to run simulations using the actual FICO Score 8 formula, as well as data from all major credit bureaus. This is an extremely easy-to-use and valuable tool for anyone who wants to understand how their financial behavior could impact their FICO Scores.”
The Score Simulator can be found at myFICO.com.
Published with permission from RISMedia.