What Is A FICO Credit Score Range?

November 7th, 2012 | Author:

When we think about credit reports and scores, we tend to think of the three major credit bureaus Equifax, Experian, and TransUnion. All three of these companies do collect information about your past and present credit accounts and do issue credit scores upon request. However, if you want to get a major financial deal such as a home mortgage loan then you need to know more about Fair Isaac Corporation. The company created and manages the FICO credit score range that so many people hear about these days.

FICO provides a score based on information from all available credit reports, which some lenders really want to know. For example, some people might have a clean TransUnion report but a litany of credit problems reported on Equifax. Representatives can issue anywhere from 300 to 850 when using a FICO credit score range.

Credit scoring formulas are pretty similar whether your potential lender is using Equifax, Experian, TransUnion, or requesting Fair Isaac’s assistance. The lower your score, the more of a credit risk you present to your prospective lender. The higher the credit score, the better financial risk you pose. Hence, you will be much more likely to receive a loan and get favorable interest rates with a FICO score of 700 or higher.

The Fair Isaac credit scoring formula assigns value to several aspects of your financial history. Thirty-five percent, or about one-third, of your FICO score is directly related to the timeliness of your payments. If you pay bills late or not at all, your credit rating plummets. If you consistently pay your bills on time, you are on the way to having a top tier FICO rating.

Thirty percent, also about one-third, of your Fair Isaac rating depends on your utilization of existing credit accounts. If you have $10,000 of available credit card limits and owe $5,000 or more on your accounts, then your credit utilization is high and decreases your score. Keep all balances to 50 percent or less of your available credit limits; about one-third utilization is even better.

Fifteen percent of your FICO rating can be attributed to the length of your credit history; the longer you have successfully used credit the better off you are financially. Ten percent of your score is determined by whether you have a diverse range of accounts. Lenders want to see you responsibly using credit cards, secured loans, and unsecured loans.

The final 10 percent of your Fair Isaac score is determined by how many recent credit applications you have completed. If you have applied for a lot of credit recently, you look financially desperate and your FICO rating will plummet. Fortunately, the score damage ends after about six to 12 months and the record of your credit applications only remains for two years.

Newest Answers

Why You Need More than Excellent Credit Scores

March 20th, 2015 | Author:
h

ou may have been working to improve your credit score for some time. You have paid down your debts, made sure all payments were on time and generally exhibited good credit behavior. Your goal is to reach a certain score, the “magic number,” that you have set as a goal. Maybe it is 700, 750 […]

Continue Reading »

What Should You Pay Attention To on Your Credit Report?

March 19th, 2015 | Author:
h

f you have ever looked at a copy of your credit report, you may find it rather confusing. There are pages of information, symbols, dates and technical terms that you don’t understand. It can be enough to make you toss it aside and forget about it. Since it is important to review your report, here […]

Continue Reading »

How You Can Damage Your Credit Unintentionally

March 18th, 2015 | Author:
h

ou probably know of several things that can hurt your credit: late payments, collections, charge-offs and bankruptcies. What you may not realize is how small, unintentional behaviors can impact your credit. 1. Carrying high balances. It is common for people to focus on paying their credit card bills on time and thinking that they have […]

Continue Reading »

How CreditVision from Trans Union May Improve Your Credit Score

March 17th, 2015 | Author:
h

rans Union is one of the three major credit bureaus that creditors report to. The company has been making some changes that could impact a customer’s ability to get approved for a loan. The change is in CreditVision. What is CreditVision? CreditVision is part of your Trans Union credit report that provides more information about […]

Continue Reading »

Experian is Trying to Change the Future of Credit Scores

March 16th, 2015 | Author:
h

xperian developed a study that showed some interesting information for consumers about credit. According to this study, people would see their credit scores improve if non-traditional credit resources were included. These non-traditional resources would include rent payments and utilities, which at this point are not included in your credit report. The only time you see […]

Continue Reading »

Changes in Credit Reports Benefit Customers

March 13th, 2015 | Author:
h

xpect to see some changes to your credit report in the upcoming months. The three major credit bureaus met with the New York Attorney General to change the reporting process. An agreement was reached that will mean changes to how information is disputed. What It Means to Customers The biggest impact to customers will be […]

Continue Reading »

Learn How to Save Money and Improve Your Credit Score

March 12th, 2015 | Author:
h

ometimes unforeseen things happen. You lose your job or a major expense creates debt you didn’t plan on. But for many people with bad credit, the reason is that they overspent and didn’t learn how to save money. Bad Credit and No Savings These two things often go hand in hand. People who spend money […]

Continue Reading »