Purpose and Management
of your Credit Score

Credit scores are so ingrained in our society it almost seems like they have always been there. Most people realize that your ability to buy a home, get a car loan, rent an apartment, or even get a job can depend on one simple number, your credit score. What many people don't know, however, is the reasoning behind having a single credit score, how the modern practice of assessing a credit score came into being, and how your credit score is used to determine credit risk.

The Creation of the FICO Score

Prior to the 1950s, when a person would apply for a line of credit the creditor would reference their credit reports to determine the credit risk. They would scour the reports line by line looking for delinquent account, payment history, open lines of credit, and othe...

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