FICO Credit Scores

Posted by Steve B.
4
Finance & Investment
Aug 12, 2019
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A credit score is an important factor to qualify for traditional loans. Your credit score determines your credit-worthiness as a borrower.

 

What Does the Term FICO Mean?

The term “FICO” is derived from the company name “Fair Isaac Corporation.” Credit agencies and lenders use FICO credit scores to determine the credit-worthiness of borrowers.



What Is a FICO Credit Score?


A FICO credit score is a three-digit number which shows the repayment probability of a borrower.


Here are the factors used to calculate your FICO credit score:

  • Payment history (35% of the FICO credit score)
  • Diverse accounts/types of credit (10%)
  • Debts/amounts owed (30%)

    • What Is Considered a Good FICO Score?

    The FICO scores range from 300 to 850 and a good FICO score starts from 670 and up. Higher credit score means lower risk to the insurance firms or lending agencies.

     

    A good credit score is important for home loans and mortgage loans. Short-term payday loans are processed even with poor credit scores, but the lowest credit score that lenders accept varies from one lender to another.



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