You’re in a financial mess.  Your mortgage debt service, which is the portion of your income that’ll have to be used to pay off your mortgage debt is 32 percent  (financial experts place the limit at 28 percent), while your  total debt service is hovering around 45 percent, way above the 38 percent advised by experts. 

Even if you’d eventually be able to stave off bankruptcy, any battle with debt will scar and tar you. The fact you have had recourse to a debt consolidation home-equity loan and even a student loan debt consolidation will show on your credit history, and they’ll be anything but flattering.  You might, one fine morning, wake up and find your FICO score a hideous 495, marking you off as a credit leper, with no creditor in his right mind willing to have anything to do with you.  With that kind of score, you probably have to kiss the real world goodbye, and why not, because statistically, only 13 of every 100 borrowers in your category are likely to make good their monthly payments.  In other words that kind of FICO score sucks, and until you do something about it, no worst-scenario gaming can save you.

Unless, of course, you start monitoring your FICO score, the better to scare you into keeping away from your credit cards, sort of like taking a peek at the future to influence the events of the present.

What Is A FICO Score? 

Fair, Isaac, and Company (FICO) is a public credit-management service company making available highly specific quality measures to lenders for their use in evaluating the credit-worthiness of a borrower.  Through long use, FICO scores have become the accepted standard by which credit worthiness is gauged. Originally used by lenders and financial institutions, FICO has become a handy tool even for headhunters, the idea being that character shows in the way one manages his finances.  Obviously, one who lives beyond his means is the last person big companies need for their top executive positions, and FICO, like the oracle at Delphi, tells headhunters much about potential candidates.

For the man in the street, the FICO score is just as important, because even if he has not been monitoring his FICO score and might, in fact, not know that it exists, the business world is using it, and will be the basis for any yes or no in any credit application. 

You may not know it, but data-collector outfits like Equifax and InfoUSA collect vast amounts of data about you right from the moment you were born till now, especially as they relate to your commercial and credit history—where you live, what kind of house you live in, what kind of car you drive, the insurance policies you have, the first and second mortgage on your house, how much you earn, how much you spend, where you bank, your marital status, your age, how many kids you have , their ages, where they attend school – you’ll be amazed at the volume of information they have on you, some of which you might be vaguely aware of yourself. 

This is information that’s shared with creditors and sellers, which enable the information about you to be very comprehensive indeed:  what credit you now have, from whom received, how much was originally available, how much have you used, how well (or how badly) have you been using your credit.  Using sophisticated algorithms, FICO can even predict your credit worthiness, or that of anyone found in its vast data banks.  The FICO scoring model has a 350 to 850 scale, 850 being the highest possible score. Here is how the FICO table looks like:

Score range Percentile ranking Delinquency rate

Up to 499 lowest 1 percent 87 percent

500 to 549 next 5 percent 71 percent

550 to 599 next 7 percent 51 percent

600 to 649 next 11 percent 31 percent

650 to 699 next 16 percent 15 percent

700 to 749 next 20 percent 5 percent

750 to 799 next 29 percent 2 percent

800 and above next 11 percent 1 percent

In the same way that one monitors his blood pressure, it might be a good idea to once in a while check on one’s FICO score.  It’s a simple matter of visiting the FICO Web site at www.myfico.com, pay $15.95, and get a one-time service score.  It’s worth every cent of your $15.95, giving you a detailed credit history with a description of the good and bad factors which brought the score where it is, plus a simulator which can show you the effect each possible course of action will have.