I was watching a sitcom the other night…I won’t say which one. I can say it was American, and I know that for many reasons. Not the least of which is because the dialogue was peppered with references to the main character’s “FICO score”.
What is a FICO score? FICO is the acronym of the company that developed this credit score. The name of the company is Fair Isaac COmpany, thus “FICO” score. A credit score is a score calculated from information on your credit bureau file. Banks, credit card companies, loan companies use credit scores in their credit adjudication processes. When you apply for a loan, chances are the credit granter is using your score to determine how you manage your credit. And they use that information to decide whether you are worthy of receiving that loan.
In Canada, we call them “scores” or “credit bureau scores”. This is because they are only available through the only two national credit bureaus in Canada: Equifax and TransUnion. The term “FICO score” is generally not known to or used by Canadian consumers.
A majority of Canadians do not know a lot about their credit score. What is it? How is it calculated? How does it impact me?
It’s really important for consumers to understand what their score is and how to keep it high. Scores range from 300 to 850. A good score is anything over 700+. The lower the score, the higher the risk, and the less chance the credit granter will approve you for that loan you so dearly want.
So how many people have never checked their credit score?
- A Bank of Montreal study showed that 56% of Canadians have never checked their credit score.
- Huffington Post: 60% of American adults surveyed were unaware of their credit score.
But to get back to the sitcom. The characters in the program were throwing the term “FICO score” around like it was part of their everyday vocabulary. This would lead you to believe not only that FICO has done a great job of branding the product…. but also that over time, Americans have become more comfortable with the idea of a credit score. The terminology (“FICO score”) creates an image and a concept that is easier to understand and adapt to. This type of branding serves to help consumers understand the impact of credit scores on their financial lives.
So what has FICO (the company) achieved in this case?
It has done an excellent job branding its product for purely business reasons; i.e. to sell more scores. But, there is also the added benefit of creating more financially literate American consumers.
And that’s a good thing!
So…..do you want to check your own credit bureau score (we’re in Canada, after all)? Go to www.Equifax.ca or www.transunion.ca.
What’s your credit score?
