What is a FICO Score

A FICO Score is a credit score created by the Fair Isaac Corporation (FICO). It is a three-digit number based on the information in your credit reports.

Lenders use the FICO Score to decide whether they will give you credit and on what terms, such as the interest charged. It helps lenders figure out if you are good at paying back a loan. FICO Score models use a range between 300 and 850 for their score. The higher your credit score the lower the credit risk for the lender. A good range to be in is between 670 to 739.

The way they calculate the score is by looking at these five categories:

• Payment history

• Amount of money you already owe

• New credit

• Length of credit history

• Credit mix as in how many different types of credit cards, retail accounts, mortgage loans you have.

This information is put together in your credit report and it determines your FICO Scores.