FICO is a mathematical model created by the Experian
credit bureau as a tool for lenders to use in evaluating
the risk associated with lending you money. FICO stands
for Fair Isaac Company, the company that created the
original scoring model. Similar models have been programmed
by the other credit bureaus but they are all referred
to as FICO scoring.
Click Here for the Credit Grade Guide
How is my Score Calculated?
Your score is calculated by a series of questions based
on both your credit report & debt-to-income ratio.
Each answer accumulates a certain number of points that
are then added together for your final score. A typical
• How long you've lived at your current address
• Your job or profession
• Your financial obligations (debt-to-income ratio)
• Any late payments
• The amount of credit you have outstanding
• The amount of credit you are using
• The amount of time you've had credit established
Most Weighted Factors:
Current balances on accounts, too few bank revolving
accounts, too many bank revolving accounts, number of
accounts with balances, number of accounts opened in
the last 12 months, length of time accounts have been
established, amount of past due accounts, number of
delinquent accounts, too few accounts rated "current,"
recent derogatory public record of collection, past
due balances, number of credit inquiries made.
What is Considered a Good Score?
The magic FICO number is 620. If you score below 620
you are considered to have a very high default risk
giving you the possibility of being declined. If you
score between 620 & 650 you will be put into a "questionable"
category where you will have to provide further documentation
to get approved. A score of 650 or above is considered
golden or "cream of the crop," and most likely
you will be eligible for the best rate on your loan.