What Is A FICO Score?

A credit score is most commonly known as a FICO score. FICO stands for Fair Isaacs Corporation. It's a company that developed the credit scoring software used to evaluate your credit worthiness.

Most lenders use the FICO score to determine whether they should extend to you a mortgage, car loan, credit cards and any other type of credit. The higher your score, the more credit worthy you are. Lenders will know that more than likely, you pay your bills on time. The lower your score, the more risk the lender takes on, guessing that you might not pay the loan on time.

The FICO score ranges from 300 to 850. More than likely, you'll end up paying a larger monthly payment on your mortgage if your score is below 650. Your credit score, according to MyFico.com, is determined by:

  • Payment history-35%
  • Amounts owed-30%
  • Length of credit history-15%
  • New credit-10%
  • And types of credit in use-10%

    • If you don't have any credit, your credit score can be lower than someone who has had a credit history for several years. When you personally check your credit often, this will not affect your credit score. When existing creditors review your credit, these inquiries are not counted in your score.

    Since payment history is 35% of your score, you want to make sure you don't have a history of late payments on your credit report. The longer your credit history, the better. Having too many new credit accounts open can affect your score negatively.

    The bottom line is that a higher FICO score means you are more credit worthy to potential lenders. The lower your score, the greater a risk you are to lenders and therefore, your monthly payments might be higher.

    Michelle Roebuck provides mortgage and home buying advice for people with bad credit at http://www.find-bad-credit-mortgage-loans.com. Sign up for her newsletter at http://www.find-bad-credit-mort gage-loans.com/newsletter.html.

    In The News:

    pen paper and inkwell


    cat break through


    Dont Trade Your Future for Todays DooDads

    "Easy Low Down Monthly Payment," "Buy Now Pay Later," "You... Read More

    Are 0% Credit Cards Reaching Their End?

    Are Credit Card companies starting to feel the pinch? We... Read More

    Bad Credit Credit Cards

    Chances are you've gotten your share of offers like this... Read More

    Preventing Credit Card Mess

    Credit card debts problem is extremely common today. It is... Read More

    Triple AAA in 30 Days

    Have you ever wonder about how to get good credit... Read More

    Credit Card Rates - Negotiating Rates with Your Credit Card Company

    Ok, let's face it, everybody hates high credit card rates,... Read More

    Dealing With A Collection Agency

    Step I - Selecting A Collection AgencySelecting a credit collection... Read More

    3 Ways to Improve Your Credit Score by 50 Points In Less Than 30 Days

    In Less Than 30 Days. "What can you do to... Read More

    Consolidating Credit Cards

    Credit card consolidation is a popular solution for those with... Read More

    Four Tips How Homeowners Can Rebuild Their Life After a Foreclosure

    Let's face it, if you are facing the possibilities of... Read More

    How to Get Credit Reporting Agencies to Help You

    The process of clearing credit can be laborious and frustrating.... Read More

    Ethical Finance: Who Benefits From Our Spending?

    On one hand consumers are being universally criticised for running... Read More

    Credit Card Expenses Are Killing Your Budget!

    Do you know the costs associated with your credit card?... Read More

    Credit Counseling: Could it Work for Me?

    In the face of financial hardship, many seeking a responsible... Read More

    Learn About Prepaid Credit Card

    Prepaid credit cards also called stored value card can be... Read More

    What You Need To Know About Credit Cards

    What is a credit card? A credit card is... Read More

    Trying to Land a Job? Poor Credit Scores May Hurt Your Chances

    Many employers are now looking at an applicant's credit report... Read More

    Save Money and Lower your Payments by Improving or Repairing Your Credit

    Having a better credit score not only represents easier access... Read More

    Credit Report ? Watch Out for Parking Tickets

    The economic downturn of the last five years has affected... Read More

    Credit Cards - A Blessing or a Curse?

    Owning a credit card can be quite an advantage. Whether... Read More

    Credit Traps Snag Consumers

    Nearly 20 years ago I worked for a small consumer... Read More

    Special Credit Information for Married Couples

    If you are married, establish separate credit accounts.Try to finance... Read More

    How To Avoid Becoming A Victim of Identity Theft

    With identity theft statistics currently at an all time high,... Read More

    Bad Credit Loans For Those Who Seek Alternatives for New or Old Car

    You can still save money on a Bad Credit Loan... Read More

    Credit Card Incentives

    Credit card companies want your business. After all, lending money... Read More

    Finance - Money, Money

    Finance is a big word for some of us. It's... Read More

    Tips for Credit Card Surfers

    Moving money from credit card to credit card to take... Read More

    Credit Card Security Advice

    Which of the following is the biggest threat to your... Read More

    Establishing Credit ? What You Need To Know Part 2

    In my previous article "Establishing Credit ? What You Need... Read More

    Credit Cards - The Basics

    How Lenders Operate ? And How They'll Make a Tidy... Read More

    Legislators Ponder New Credit Protection Laws

    Legislators in Washington, D.C. are considering several credit-related consumer protections... Read More

    14 Common Credit Mistakes

    Establishing credit and wisely managing your credit becomes easier when... Read More

    Shoppers Beware - Tis The Season

    It's the number one complaint from consumers and it only... Read More