Understanding Fico Scores
Fico scores are the most important criteria for a lender or creditor to
extend you a loan or a line of credit.
The mathematical model to calculate the three digit FICO Score is proprietary, and not made public. We do know that the following factors affect your fico scores:
Accounts : The more the debt you have also known as high income debt ratio,
the higher the risk you are and this lowers you Fico score.
- Derogatory Information : The most recent two years of credit
history are weighted higher than past history.
- Credit History : The longer the credit history or account
is established the better. Your employment on your report also
is a plus, the longer you have been working at an employer the
better. Beware of open credit, open credit are those accounts
that are open with no debt and have not been used for over one
year. This may count against you when applying for any credit.
The lender or creditor may say that you can theoretically max
out these accounts and higher you income to debt ratio.
- Use Of Credit : The fewer the credit accounts open
the better. Additionally, the less credit inquiries the better
the Fico scores. If there are many credit inquiries or credit
check the lender may think you are trying to open numerous accounts.
Typical Fico Score grades:
- 750 and above Excellent A++
- 680 to 750 Very Good A+
- 620 to 680 Good A
- 580 to 680 Above Satisfactory B
- 550 to 580 Satisfactory B-
- 480 to 550 Below Satisfactory C
Get a copy of your credit report (click
Credit Reporting Agencies
Experian Credit Information Service
PO Box 2002
Allen, TX 75013-2002
Equifax Credit Information Services
PO Box 740241
Atlanta, GA 30374-0241
PO Box 1000
Chester, PA 19022-1000