![]() For example, if your three FICO scores are 680, 530, and 630 your middle score is 620. Since the three scores can vary, some lenders will use the middle score (sometimes called the “representative” credit score). All of the scores, however, are developed using the same methods by Fair Isaac and have been rigorously tested to ensure they provide the most accurate picture of credit risk. ![]() The calculation is based on five categories: 1) payment history 2) amounts owed 3) length of credit history 4) new credit and 5) types of credit used.Įach credit reporting agency (TransUnion, Equifax, Experian) has a different FICO Score calculation that is determined by the information in that agency’s credit report for a specific person. This score is based solely on information found in your credit report and ranges from 300 – 850. The FICO Score was created by the Fair Isaac Corporation and is the most widely used (90% of lenders rely on the FICO Score). When you apply for credit from a lender, chances are they will pull your FICO® Score. A low credit score could indicate a higher risk to the lender. A high credit score indicates you are a low-risk borrower (have a history of on-time payments, do not over-extend credit, and don’t have too many credit accounts). Lenders use the credit score to determine whether or not to lend to you, what the interest rate will be on the loan, and other terms that impact the cost of credit for the consumer. A credit score is an assessment of your creditworthiness. ![]()
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