A FICO score is a number used to determine a person's creditworthiness. It is necessary to understand concepts that are false regarding a credit score.
Eligibility
A person's score alone does not determine whether new credit is extended. Income, employment history and a lender's underwriting policies also determine whether a person can obtain credit. An individual with a low score can still have credit extended to them, while a person with a high score can be declined.
Low Score
A low FICO score is not permanent. When new information is added to a credit report, a score can increase. As a score increases, a low score becomes less relevant over time.
Discrimination
FICO scores do not use race, sex, nationality and marital status to determine a score. The Equal Credit Opportunity Act forbids the use of this information when extending credit. Only information related to credit is used to in determining a score.
Privacy
Privacy is not infringed upon with credit scoring. A lender will require information that is already included with a credit report.
New Credit
Applying for new credit does not cause a significant drop in a FICO score. However, applying for numerous credit cards in a short period of time can be an indication to lenders of financial problems. Credit pulled multiple times, over a short period of time, to compare rates for a mortgage or car loan will not cause a large drop in the score.
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