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What is a FICO Score?
A specific kind of credit score, a FICO score is determined by a system created by the Fair Isaac Corporation.
FICO scores are the most common scores used when determining the strength of one's credit.
FICO scores range from 300-850, with 850 being the highest possible score.
Along with information on a credit report, lenders (whether it's for a credit card or a mortgage) use this score when considering loan applications (including how much to loan and the interest rate).
It is up to the lender to decide what is a "low" or "high" score. But generally, they tend to give preferential terms to borrowers with scores that are at least 650.
According to FICO, there are five things that influence scores:
- types of credit a borrower has (10 percent)
- recently opened credit accounts (10 percent)
- length of credit history (15 percent)
- amount owed (30 percent)
- payment history (35 percent)
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