The Fair Isaac Corporation, also known as FICO, uses an individual's credit information in order to come up with a score which can range from 300 to 850. Lenders are then able to review the score and determine an individual's creditworthiness.
The Facts
A FICO score reflects the information found in an individual's credit report, which is available through any one of the three credit bureaus including Equifax, Experian and TransUnion. Information regarding five major areas such as payment history, account balances, length of credit history, newly established credit lines and credit types are used to calculate a FICO score. The importance that is placed on each of these areas varies depending on each individual and on their recently updated credit information.
Time Frame
A FICO score is based on information that has been reported to the credit bureau and listed in an individual's credit report. Due to delays in the reporting procedures used by some creditors, the score may not be based on activities from the most recent months.
Considerations
An individual's age, employment and banking information are not part of a FICO score. However, a FICO score does take into account all closed accounts, regardless of whether they were paid off on time or delinquent.
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