What is fico score?
The FICO credit scoring method (which was developed by the Fair, Isaac Company) applies a mathematical equation to information on the borrower’s credit report. This calculation produces a number that represents the borrower’s credit risk. FICO scores range from 300 (higher risk) to 850 (lower risk). The score takes into account payment history, amounts owed, length of credit history, new credit, and types of credit accounts being used. FICO scores are calculated by the credit reporting agency, which means that each credit agency may arrive at a different FICO score depending on the data contained in their credit files. The FICO credit scores is just one of the factors a lender uses when deciding whether the borrower qualifies for the loan program requested.
