What's A FICO Score | What Do The FICO Scores Mean?

What's A FICO Score | What Do The FICO Scores Mean?

Your Fico score is calculated using a mathematical equation to compare information on your credit file with millions of other credit files. This score can identify your level of credit risk.

The higher your Fico score, the more likely it will be that you will be approved for a loan with lower interest rates.

The term “Fico Score Range” is the range of all Fico scores, which is between 300 and 850. More than 70% of the 100 largest financial institutions use FICO® scores to make their credit decisions every year, including over 75% of all mortgage loans.

Lenders use FICO scores to determine how you have managed your credit accounts in the past to help determine if they will give you a loan. This will also determine the interest amount you will pay on that loan. The higher your FICO score, the lower the interest rates.

Your FICO score is a valuable guide for money lenders and is based entirely on the information in your credit history. Lenders will also take into account the information you provide in your credit application. This could be, your income, how long you have been at your residence, and your payment history with other banks or lending institutions.

Your FICO score is divided into different sections:

• Summary– The summary shows your FICO score and the date it was calculated, with a description of what your particular score means. Other details on your FICO score are available in other sections.

• Top Positive Factors– The information listed in this section show areas of your credit behavior that are better than average. This contributes to a higher FICO score, and continuing to manage your credit over time will give raise your credit score even more.

• Top Negative Factors– If you have a high credit score, these items have not affected it and should not be taken too seriously. These are factors that have some room for improvement, and can give you a better understanding of how to manage your credit better.

• How Lenders See You– The majority of lenders use FICO scores to estimate your credit risk. People with high FICO scores are a better credit risk than those with lower scores. There is no way to absolutely predict whether an applicant will repay a credit account.