The first part is simple: The Fair Isaac Corporation. Sounds mysterious, doesn't it? What the heck is a



Fair Isaac? Nothing. It just happens to be the names of the men who started the company.

In 1956, engineer Bill fair and Mathematician Earl Isaac joined forces to create what was originally a consulting and decision management service. Then in 1981 they devised a system for scoring the amount of risk associated with making certain loans and investments, and the FICO score was born.

The score is generated by statistically analyzing an individual's credit history. Among other things, this scoring system takes into account:

? Bill paying history

? Debt to income ratio

? Debt to available credit ratio

? Length of time a person has had and used credit

? Existence of bank accounts

? Number of recent credit inquiries

Each factor in your financial makeup is given a "weight" toward your final score, which is a calculated risk factor, based on the past performance of others whose financial history is similar to yours. Through this score, lenders are shown the statistical likelihood that you will pay your debts. Then they determine under what conditions and at what rate of interest they will lend to you.

If your score is 720 or higher, you'll have an easy time getting a loan. If your score is under 600, you'll be considered a poor risk and if you can get a loan, it will be at a higher rate of interest.

FICO has become a giant in the American world of finance. In addition to providing credit scoring, FICO provides consulting and management services to over 200 international retailers, 99 of the top 100 U.S. banks, and over 100 international telecommunications companies.

Headquartered in Minneapolis, Minnesota, FICO has offices on 5 continents, employs over 3,500 people, and turns a revenue of over $800 Million every year. FICO is not associated with the government, but like Equifax, Experian, and TransUnion, is a publicly traded company.

You should always be aware of your credit score, so that you can make adjustments and take steps to keep it high. You can buy the report directly from FICO, or you can take advantage of a free credit score report from one of many online providers.