By Joanne Gaskin, Vice President of Scores and Analytics, FICO
The last year has caused us to shift priorities like never before. From taking extra precautions for our health to evolving how we run businesses, we are all thinking differently and more thoughtfully about all aspects of our lives. Personal finances and credit health are no exception.
While many people have ambitious, long-term financial dreams—starting a business, achieving the dream of homeownership or getting out of debt—understanding the steps as well as available tools to achieve those dreams are equally important. For starters, small business owners can significantly improve their understanding of what loan may be available to them by first taking steps to know their personal credit score.
Credit scores enable lenders to gauge how likely you are to pay back a loan based on your credit history. FICO® Scores are used by 90% of the top U.S. lenders. The all-industry FICO® Scores range from 300-850, and are designed to be empirically derived using five primary factors: payment history (35%), amounts owed (30%), credit history (15%), credit mix (10%) and new credit (10%).
Whether you are preparing to apply for a loan to support your own business, seeking more favorable terms or concerned about protecting your financial health as a result of the COVID-19 pandemic, knowledge is power. This is why FICO is so excited to have NAWBO as a national partner for our Score A Better Future program, an ongoing series of free financial educational events to provide consumers and entrepreneurs with credit knowledge. Women entrepreneurs are leaders in their communities, and financial education—whether as a new small business owner or someone who has been in business for years—is lifelong learning that will empower entrepreneurs to take charge of their financial futures.
Score a Better Future’s goal is to continue to demystify credit, provide a deeper understanding of the key factors that drive a FICO® Score and offer attendees the educational tools to take control of their finances. According to a recent survey conducted by FICO of Score A Better Future attendees, the majority of respondents (92%) feel it’s more important than ever to understand the top factors that impact your credit score.
In celebration of April Financial Literacy Month, FICO will be hosting a free webinar, Score A Better Future | Credit Basics with FICO, on April 23rd at 9 a.m. PT/ 11 a.m. CT/12 p.m. ET. I have the honor of presenting with Megan Leonhardt, senior money writer with CNBC Make It, and Bola Sokunbi, CEO and founder of Clever Girl Finance, to talk about credit scores, financial health and how we can all “Score A Better Future.” To register or to get more information about this and future Score A Better Future events, please click here.