FICO Score

The credit score is a way to decide the creditworthiness of a person. The credit score sis a number based on the statistics of a person’s credit file. It is based on the credit report information. The credit score is used for banks and credit card companies to help them decide if you are a solid investment or not.

The FICO is the most widely known type of credit score. The FICO score was developed by Fair Isaac Corporation. Many different mortgage leaders use this FICO score to decide the chances of a barrowers default. The FICO score is the most common credit score used by lenders.

The FICO score is determined by five different things. These items help evaluate the chances of a barrowers chance of default. The first thing that is used is your payment history. If you have a long history that shows that you have made payments on time, then your FICO score will be high. The main idea is that with a good payment relationship to those places you owe money will gain you point in the FICO score.

The second thing to determine your FICO score is your level of indebtedness. If you are about to max out all your credit cards, your FICO score is lowered because you could risk a late payment. The third determining factor is the length of your credit history. If you have accounts that have been opened for a very long time, your credit score will go up. This shows how good you are with keeping track of accounts.

Along with old accounts comes new credit. FICO scores take into account how often you apply for credit. If you open a lot of new credit accounts, you will lower your credit score. It is important to remember that the more inquiries you make, the greater risk you take for lowering your FICO score. The last item the FICO looks at is the type of credit that you are using. All the credits you have are considered.

The FICO score will not consider a lot of things when it comes to calculating a score for you. They do not look at your race, religion, national origin, sex, color, sexual orientation or age. They also do not care if you are married or single. It is bias free and is scored only by what your credit shows. The FICO scores will allow you to get loans, credit cards, or a mortgage. It is important that you take care of it and always try to raise the score.