13 Interesting Facts About Credit Scores

Credit scores are a common topic in the mortgage industry. In today's blog, your favorite mortgage lender at the Lake of the Ozarks offers a few interesting facts about credit scores. Keep reading to see if you've heard any of these fun facts before.

1. The widely used FICO (Fair Isaac Corporation) score is based on the work of engineer Bill Fair and mathematician Earl Isaac, who founded the firm in 1956. They developed the first credit bureau-based scoring system in the mid-1980s.

2. Credit scoring got a huge boost in 1995 when the U.S.’s two largest mortgage-finance agencies, Fannie Mae and Freddie Mac, recommended lenders use FICO credit scores. Their recommendation carried enormous weight in the home loan industry.

3. Some variation of the FICO score is used in 19 countries outside the U.S.

4. The “Great Recession” had a significant impact on the credit-scoring world. More people fell into the lower brackets: 25% had scores under 600 in October 2010, compared to 15% in 2006.

5. To get the highest possible credit scores, a person needs both revolving debts, such as credit cards, and installment debts, such as mortgages or auto loans.

6. The average American has 13 credit accounts showing on their credit report, including 9 credit cards and 4 installment loans.

7. Most Americans use less than 30% of their available credit limits. Only 1 in 6 uses 80% or more.

8. Maxing out credit cards damages credit scores by 10 to 45 points.

9. About half of Americans don’t have a single late payment on their credit reports. However, approximately 4 in 10 have been 60 days or more overdue in the past 7 years.  

10. Over 144 million people, or 2/3 of American adults, haven’t looked at their credit report in the last year. Over 1/3 of Americans adults admit that they do not know their credit score.

11. There's an online dating service out there called CreditScoreDating.com for those that are concerned with the financial situation of their potential mate.

12. The Bangladesh-based Grameen Bank uses gender in its credit scoring model and mostly lends to women. As of December, 2015, the bank had 8.81 million borrowers, 97% of whom were women. To them, women are seen as more responsible borrowers than men.

13. More than 8 million people fall victim to identity theft in the U.S. each year. Consumers spend hundreds of millions of hours trying to resolve the problem, stop the fraud, and clear up their credit reports.

When it comes time to secure a mortgage at the Lake of the Ozarks, your credit score is an important factor. There are a number of programs available to help borrowers better their credit score. A solid credit score lends to more financing options when preparing to buy a home. For more information on how your Lake of the Ozarks mortgage lender can help you purchase your dream home, give me a call at 573-746-7211.

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Michael Lasson

Senior Loan Officer

NMLS #: 493712

4655 B Osage Beach Parkway

Osage Beach, MO 65065

Direct:  (573) 746-7211

Cell: (573) 216-7258

Fax:(866) 397-0318

Email:  mlasson@fsbfinancial.com

**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.