FICO Score

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DEFINITION of 'FICO Score'

A type of credit score that makes up a substantial portion of the credit report that lenders use to assess an applicant's credit risk and whether to extend a loan.

FICO is an acronym for the Fair Isaac Corporation, the creators of the FICO score.

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BREAKING DOWN 'FICO Score'

Using mathematical models, the FICO score takes into account various factors in each of these five areas to determine credit risk: payment history, current level of indebtedness, types of credit used and length of credit history, and new credit.

A person's FICO score will range between 300 and 850. In general, a FICO score above 650 indicates that the individual has a very good credit history. People with scores below 620 will often find it substantially more difficult to obtain financing at a favorable rate.

To learn more about how your credit score is calculated, read Does having several credit cards hurt my credit score?

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RELATED FAQS
  1. What are the differences between balance-to-limit ratio and debt-to-income ratio?

    Both your balance-to-limit ratio and your debt-to-income ratio are very important figures when you apply for and obtain credit, ... Read Full Answer >>
  2. How do secured credit cards help me build my credit score?

    A secured credit card is a common, relatively safe strategy for those with little or poor credit to improve their credit ... Read Full Answer >>
  3. What's the difference between credit score and credit history?

    Credit history refers to a consumer's past credit actions. Detailed on a credit report, it is a consumer's record of incurring ... Read Full Answer >>
  4. Do unpaid medical bills appear on my credit report?

    An unpaid medical bill can appear on a credit report, usually after it is turned over to a collection agency. The most common ... Read Full Answer >>
  5. Is my credit score usually checked before receiving a payday loan?

    Payday loans or cash advances are short-term, low-balance, high-interest loans. They are known as payday loans because of ... Read Full Answer >>
  6. How can I improve my chances of getting a credit limit increase?

    A credit limit increase can help your credit score by improving your credit utilization ratio. It allows you to borrow more ... Read Full Answer >>
  7. Does bankruptcy information go on the public record?

    Documents relating to cases of bankruptcy are a matter of public record. Their contents can be viewed by anyone with access ... Read Full Answer >>
  8. Will using an overdraft hurt my credit score?

    Overdrafting a bank account does not directly hurt your credit score unless the debt is ignored for so long that the bank ... Read Full Answer >>
  9. What is the difference between bad credit and no credit?

    The answer to this question will depend on what information (if any) is found on your credit report, such as any bankruptcy ... Read Full Answer >>
  10. How is my credit score calculated?

    The credit score, commonly referred to as a FICO score, is a proprietary tool created by the Fair Isaac Corporation. This ... Read Full Answer >>
  11. What is the highest achievable FICO score?

    Your FICO score is used by creditors to determine the overall credit risk of any individual consumer. This score is calculated ... Read Full Answer >>

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