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What Is My Credit Score or FICO Score

What is my credit score is an important question to get answered for financial reasons. To know What is my credit score you will have to first understand What is a credit score. The credit score which is also known as FICO score is a concept created by Fair Isaac Corporation. Fico score is proprietary of Fair Isaac Corporation and hence the formula used to calculate the Fico score is under the wraps.

Credit score is a three digit number which defines an individual’s credit worthiness. Higher the credit score better is an individual’s credit worthiness and hence lower is the risk of lending to the individual.

From Bankers to employers many use credit score as a base to determine the financial risk. Hence it is very important to know how much is the credit score and try to improve the credit score as much as possible, though not everyone lends based on credit score.

Good credit score ranges anywhere from 825 to 650. Low credit score is from 575 to 650. Anything below 575 is considered as Bad credit score. For someone with a good credit score the rate of interest will be lesser as the risk associated is lesser compared with someone with a bad credit score.

Credit scores are determined based on the following factors.

1. Payment history

Payment history says about your past financial obligations and how quickly you met them. Problems such as bankruptcy will reduce your credit score. If you paid your credits promptly you will get a higher credit score.

2. Current debt

How much you owe contributes to your credit score. This factor considers the present financial position. If you are in debt with a large number of sources then obviously it is going to pull down your credit score significantly.

3. Duration of Credit History

If you are having a good credit history over a long period of time, then you will land with a good credit score. It is similar to someone with longer work experience is preferred over someone with lesser work experience. Having a good credit history over longer time period is important.

4. Number of Credit

If a person has more number of credit cards, then it gives a negative impression about the person’s finance and so it will lower the person’s credit score. Someone with lesser credit sources will be given a higher credit score.

 
 
Credit Report Basics FAQ

Are you interested in knowing what information is included in a credit report and what's not? What should you do if you find an error on your Experian credit report? Find the answers to these and other common questions about credit reports.

»What information is included in my credit report?
»How often should I check my credit report?
»What should I do if I find an error in my credit report?
»What information is not in a credit report?
»How can I get a copy of my credit report besides online?

Credit Score Basics FAQ

Credit scores - What are they, and how are they calculated? Get the answers to your credit score questions.

»Is there just one credit score?
»What information goes into calculating a credit score?
»Why don't I have a credit score?
»How often do credit scores change?
»What is the credit score range?
»What is a good credit score?

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