UNDERSTANDING FICO SCORES
PROBLEM
This report is designed to inform the reader about FICO scores and make recommendations on ways to maintain a favorable score or improve an unfavorable score. This report will also answer these specific questions:
? What is a FICO score?
? How is the score determined?
? What effects does your score have on receiving credit?
? How do you find out what your score is?
? How can you improve your score?
BACKGROUND
In the lending industry, the FICO score is a tool used by financial institutions to asses a borrower's ability to pay a loan back on time. This assessment will determine what interest rate the borrower will pay and also whether or not they are granted the loan at all.
Most borrowers do not realize the importance of their score which is why this report was originated.
The research in this report was taken from a few different sources. The primary research was conducted by distributing a survey to the general public. The survey was designed to help us understand how much people actually know about their score. However, due to limited time and resources the survey was completed by only 20 people. The information provided by the survey was still useful despite the limitation on sample size. The secondary research was taken from websites, books, and training materials from the lending industry.
This report will contain three main sections. The first, Discussion of Findings, will give detailed answers to the first three main questions listed above. The second, Recommendations, will give specific strategies for improving yo ...