Friday, February 1, 2008
FICO 08: What You Need To Know,
Mission Statements 101
Mission Statements 101
Does your company have a mission statement? Probably so – but do you know what that mission statement is? A mission statement is meant to convey the “lifeblood” of a company; everyone who works within the organization should know exactly what the corporate vision is and be able to incorporate it into daily work activities. So, what exactly is a mission statement, and why do so many fail?
Many employees fail to see the link of why a mission statement and/or corporate vision is important to the success of the organization. But, in actuality, it can be critical to the advancement of your corporation. A mission statement should answer all of the following questions: What does your company do? How is it done? And finally, who is the customer?
A vital key in successful mission statements is what some in the business world call “linkage.” It is the idea of linking the mission statement or vision directly with the business strategy. There is no point in a mission statement or vision that is not directly aligned with the corporate strategy. For example, it would not make sense for Coca Cola to have a mission statement such as: “To be the most innovative and cutting edge distributor of high-end food additives and enhancers.” To start, they are a manufacturer AND a distributor. Also, their main products are not flavor enhancement and additives, and, they certainly don’t cater to a high-end customer base. This is why Coca Cola’s mission is:
To Refresh the World…in body, mind and spirit
To Inspire Moments of Optimism…through our brands and our actions
To Create Value and Make a Difference…everywhere we engage
Coca Cola and many organizations understand the importance of a solid mission/vision. Some organizations have even developed shared values that the corporation wishes to have at the “core” of all they do. It is extremely important to have everyone in the organization be keenly aware of the mission statement/vision, from the receptionist to the Chief Executive Officer. Be sure that you know your company’s mission statement and strive to learn ways in which you can do your job to best reflect this mission.
FICO 08: What You Need to Know
Fair Isaac Corporation, developer of the FICO credit score used by most lenders, is changing its scoring model. Called FICO 08, the new model will seek to be more forgiving to those who “slip up” occasionally and punish those who are “repeat offenders”. Fair Isaac says the new model will better predict those who are more likely to default on a loan and also help lenders reduce default rates on their consumer credit by anywhere from five to fifteen percent.
Consumers can expect to start seeing the new credit scores around spring of 2008; however, the rollout may take longer in some circumstances.
FICO 08 will mostly look and feel like the existing credit scoring system to consumers and lenders. Scores will still range from 300 to 850 and will continue to be based on current factors, including:
• consumers' level of credit indebtedness and payment history
• ength of credit history,
• number of recent credit openings and inquiries, and the type of credit used. However, FICO 08 will evaluate the information more finely in order to differentiate “good risks” from “bad risks”.
So, though the scores may look and feel the same, two people today with the same credit score could look significantly different from each other under the new system. According to an article in the Wall Street Journal, “FICO 08 gives more points to consumers who maintain a variety of credit types, such as credit cards, a mortgage and auto loan, because it shows they can manage payments on different kinds of loans. On the other hand, the new scoring system penalizes to a greater degree borrowers who use a high percentage of their available credit.
According to the same article, “FICO 08 also will draw greater distinctions among different borrowers who are at least 90 days late in making a loan payment, known as a serious delinquency. Traditionally, many credit-scoring models grouped subprime consumers into one general category. But Fair Isaac says its new model will give a higher score to a borrower in arrears if they also have a number of other credit accounts in good standing. Conversely, a person's score could drop if he or she has multiple delinquent accounts.”
It would be worthwhile to review your credit in the upcoming spring and summer months to determine if your credit score has been changed by the new FICO 08 standards. Individual credit bureaus such as TransUnion, Equifax and Experian Group can all provide this information. Likely, most consumers will see an increase in their score. Keep in mind that credit reports can have incorrect information. Any discrepancy should be reviewed by the credit report organization and dealt with on a case-by-case basis.