YOUR FICO SCORE AND YOU
What is a FICO® Credit Score & How is it Calculated?
A FICO® score is a type of credit score created by the Fair Isaac Corporation. Lenders use borrowers’ FICO scores along with other details on borrowers’ credit reports to assess credit risk and determine whether to extend credit. Here is how a FICO score is calculated:
35% Payment History: The first thing any lender wants to know is whether you’ve paid past credit accounts on time.
30% Amounts Owed: When a high percentage of a person’s available credit has been used, this can indicate that a person is overextended, and is more likely to miss or make late payments.
15% Length of Credit History: In general, a longer credit history will increase your score.
10% Credit Mix In Use: FICO Scores will consider your mix of credit cards, retail accounts, installment loans, finance company accounts and mortgage loans.
10% New Credit: Research shows that opening several credit accounts in a short period of time represents a greater risk – especially for people who don’t have a long credit history.
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