FICO Credit Scores

A credit score is an important factor to qualify for traditional loans. Your credit score determines your credit-worthiness as a borrower.

What Does the Term FICO Mean?

The term “FICO” is derived from the company name “Fair Isaac Corporation.” Credit agencies and lenders use FICO credit scores to determine the credit-worthiness of borrowers.

What Is a FICO Credit Score?

A FICO credit score is a three-digit number which shows the repayment probability of a borrower.

Here are the factors used to calculate your FICO credit score:

• Payment history (35% of the FICO credit score)
• Diverse accounts/types of credit (10%)
• Debts/amounts owed (30%)

What Is Considered a Good FICO Score?

The FICO scores range from 300 to 850 and a good FICO score starts from 670 and up. Higher credit score means lower risk to the insurance firms or lending agencies.

A good credit score is important for home loans and mortgage loans. Short-term payday loans are processed even with poor credit scores, but the lowest credit score that lenders accept varies from one lender to another.

Read more here: FICO Credit Scores: What You Need to Know