FICO (Fair Isaac Corporation) scores are the most commonly used type of credit score. Creditors use FICO scores to predict the likelihood that you will repay a loan in a timely manner. Having a good score will assure that you get the best possible interest rates and credit terms.
What Is a FICO Score?
A FICO score is a number between 300 and 850 that reflects your credit history. The score is calculated by weighing different factors of your credit using a computer program produced by the Fair Isaac Corporation.
How Is a FICO Score Calculated?
Each category of your credit history is assigned a weight that is figured into your score. These include payment history, amount of money owed (debt to income ratio), length of credit history, types of credit and new credit.
What Is a 'Good' FICO Score?
To get the best credit terms, a score of above 700 is optimum; however, any score above 600 is considered acceptable.
What Is a 'Bad' FICO Score?
A score of 500 or below is considered unacceptable, and individuals with scores in this range may be unable to get credit or can expect to pay exorbitant interest rates.
How Can I Improve My FICO Score?
Making loan or bill payments on time consistently is the fastest way to improve your FICO score.
How Long Does Information Remain on My Credit Report?
Information regarding negative payment history will remain on your credit report (and affect your FICO score) for seven years, with the exception of bankruptcy, which stays in place for 10 years.
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