What is a FICO score?

Mark Deaton

FICO And Credit Repair

The biggest factor in obtaining credit, your interest rates and loan terms is not who you are or what you do.

It is all based on a simple number system that tells creditors if you are good for your word with the credit, and if you are going to default on your loan.

It is your FICO score, and it is the most important part of your credit life.   

The Fair Isaac Corporation score will vary between 300 and 850. The lower you are in your FICO score, the worse the credit history you have. Typically, the rating breaks down like this for how good your credit is. 

If you are 300 to 500, you have poor credit and you will not be getting any sort of loan or credit, its time for you to learn some credit repair essentials.

 If your credit is between 300 and 500, you need to rebuild your credit and get it back to respectability. 

If your credit score is 500 to 600, then it is fair but not great. You can get credit but your interest rates and loan terms will be unfavorable to you, you would also benefit from sound credit repair techniques.

However, if you have a FICO score of 600 to 700, then you have good credit and should be able to get any loan you want. However, if you are on the lower end of the 600s, then you may not get great interest rates. 

If you have a FICO score between 700 and 850, you have excellent to perfect credit. In this case, interest rates will be low, you can get any loan you want and will often be approached by creditors to get credit from them. 

Your FICO score breaks down in the following manner: 

• Your payment history makes up 35 percent of your FICO score. The payment history will reflect how late you have been on your payments, and the more late payments you have on your bills, the lower your credit rating will be as a result. 
• Outstanding debt makes up 30 percent of your FICO score. Outstanding debt is how much of your available credit you have used. If you have used 80 percent of the available credit on your credit cards, your FICO score will be lower than if you only used 25 percent of your available credit. 
• Account history makes up 15 percent of your credit score. If you have new credit, or are just rebuilding your credit, then your credit score will be lower than if you have 30 years of good credit behind you. 
• Inquiries made on your credit account for 10 percent of your credit score. This means that if you seek credit on a regular basis, you can damage your credit more than if you try to get credit only on occasion. Creditors do not want compulsive borrowers. 
• The type of credit you have makes up 10 percent of your FICO score. If you have a good mix of credit types like auto loans, mortgages and credit cards, then you will have a better FICO score. 

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