How the FICO Credit Score is Calculated

Introduction

If you are interested in getting your credit under control, you will need information about your credit score and about how your credit score is calculated. This article is prepared to provide you specific information about how your credit score is calculated.

A Close Up Look at Credit Score Calculations

When all is said and done, your credit score, is based on your past credit history above all else. At the outset, your credit history is considered and reviewed in detail in the computation of your credit score. From this review, that all-important number ultimately is assigned.

The final score is based on how long you have had credit as well as what types of credit, your payment history and if you have had any late payments, and existing loans or credit and the status of those accounts. Although employment and wages play a big role in extending credit, these items—plus a few others—determine your credit score.

From your history, your credit score will be assigned. Potential creditors will use the report and score, wages, job history, and other financial issues to determine your credit rating and whether you can handle more credit or loans. If they determine that you can, your credit score is often used to determine your interest rate and type of credit you will get. rewrite

Where You Stand … A Look at Credit Score Statistics

In an effort to better understand your overall credit score, it is useful for you to see how your credit score matches up with the credit score of other men and women. This chart is designed to provide you an overview of such information to better aid you in coming to a complete understanding of your credit score.

Score	Population	Rate of Delinquency
300 to 499	1%	87%
500 to 549	5%	71%
550 to 599	7%	51%
600 to 649	11%	31%
650 to 699	16%	15%
700 to 749	20%	5%
749 to 799	29%	2%
800 and up	11%	1%

Improving Credit Score

Checking Credit Score

Latest News

4/23/08

A credit inquiry typically lowers your score by five points or less. Credit inquiries reduce credit scores because lenders believe that multiple inquiries are associated with high risk of default.

1/20/08

With the introduction of the VantageScore in addition to the FICO score, consumers are confused about the credit score range and about the credit scoring in general. Here are the main differences between the two credit scoring systems.

11/28/07

Zopa Ltd., a United Kingdom player in the person-to-person online lending market, is starting operations in the U.S. where it will join a handful of other companies, including Prosper Marketplace Inc.'s Prosper.com, that have popularized the market in recent years.

6/25/07

Equifax Inc. emphasized that VantageScore(sm) and the Equifax Risk Score 3.0 are not - and never have been - impacted by the authorized user manipulation. Authorized user information is excluded in calculating both VantageScore and the Equifax Risk Score 3.0.

6/18/07

Although Fair Isaac Corp., the Minneapolis company that created the FICO score doesn't give out many details about the changes, the company spokesman said there will be more segments in their scoring model.

6/11/07

As credit scores take more important role in many parts of our lives, more ideas are popping up everyday to boost our credit scores. Recently, some borrowers with low credit scores are turning to a fast-growing business on the Internet: “Credit Renting.”

6/8/07

The Supreme Court ruled in favor of two large insurers, limiting the circumstances under which companies must tell customers their credit ratings are affecting the amount they pay.

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