A FICO score is one way for lenders to measure your creditworthiness when they are considering extending you a loan or a line of credit.
Score Scale
The FICO scoring scale runs from 300 to 850, with higher scores meaning a lower risk of default on the loans. According to MyFICO.com, the median credit score is between 700 and 749.
Good Scores
According to Bankrate, a score of 760 puts you in an excellent position. Scores of 720 and higher will also generally qualify you for most credit cards.
Bad Scores
According to Bankrate.com, subprime borrowers are those who have credit scores below 620. If your score falls beneath this level, you will have a hard time getting approved for loans and will pay a much higher interest rate when you do get approved.
Function
Factors the score looks at include your payment history, how much money you owe, how long you've been using credit, how much new credit you've applied for and the variety of credit that you have used.
Time Frame
Most items the FICO score examines remain on your credit report for seven years. Exceptions include inquires, which only remain for two years, and Chapter 7 bankruptcies which remain for 10 years.
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