How is your FICO score determined?

Steve — Fri, 22 May 2009 02:37:55 +0000

It is difficult to judge exactly how much an action is going to affect your FICO score and it will vary among different people with different credit profiles. Not one piece of information or factor alone in your credit report will determine your score. Your FICO score only looks at information in your credit report. However, lenders look at many things when making a decision including; income, employment history, etc.

We are able to sort the data within a person’s credit profile into five categories; Payment History, Amounts owed, Length of Credit History, New Credit and Types of Credit used. The percenteges in the image below pertain to the general population. For some groups, such as people who have not been using credit long, the importance of these categories will vary. Payment History:

Account payment info on specific types of accounts such as credit cards, mortgage, installment loans, etc.
Severity of delinquency
Amount past due on delinquent accounts
Presence of adverse public records such as bankruptcy, liens, etc.
Number of accounts paid as agreed
Number of past due items on file
Time since past due items, adverse public records or collection items

Amounts owed:

Amount owing on accounts
Number of accounts with balances
Amount owing on specific types of accounts
Proportion of installment loan amounts still owing compared to original loan amount

Length of Credit History:

Time since accounts opened
Time sine account activity

New Credit:

Number of recent credit inquiries
Number of recently opened accounts
Time since credit inquiry

Types of Credit Used

Number of various types of accounts

What is a FICO score?

Steve — Thu, 21 May 2009 05:35:02 +0000

In simpler terms, a FICO score is simply your credit score. FICO stands for Fair Isaac Corporation which was founded in 1956. They developed the FICO score, which is a measure of credit risk. The Fico score is calculated statistically with information within a consumer’s credit file. FICO scores are used primarily in credit decisions by banks and other providers of credit. Banks may offer better interest rates on loans, mortgages or other financial instruments to those consumers who have a higher Fico score. Consumers with a low FICO score may be denied credit, charged higher interest rates, or require extensive income and asset verification.

Credit Repair » Fico/Credit Score

How is your FICO score determined?

What is a FICO score?