What is a FICO score?

Answer 1

A FICO score is a numerical evaluation of your creditworthiness as a borrower. If you take a loan (such as a mortgage) out, this score helps the lender evaluate your ability and willingness to pay back that loan. The FICO score attempts to determine the likelihood you will repay your bills based on a number of factors. Your FICO scores are computed by credit bureas based on your history. The three major credit reporting bureas are Experian, Trans Union, and Equifax, each of which computes a score based on a unique model. While credit bureaus do not reveal how exactly the FICO score is computed (which has been ruled acceptable by the Federal Trade Commission), the following factors are known to be among the determinants of your FICO score: * Amount of Credit Used vs. Amount of Credit Available (e.g., have you maxed out several credit cards?) * Late Payments on Credit Cards * Employment history * Length of Time at Current Residence * Negative Credit Events (e.g., bankruptcies, collection agencies, etc.) Note that never having had a credit card or loan isn't necessarily good for your credit score, as you will simply have no credit history on which to judge your FICO score.