What is a FICO credit score?
A FICO score (developed by Fair Isaac & Co.) is a credit score that describes the probability of credit bill payment based on credit history and a macro-level formula estimating credit behavior. There are actually three credit scores, one type from each of the three credit bureaus (Experian, Trans Union and Equifax) and some lenders use one or the other while other lenders use the middle score. Your credit score takes into account how long you have had your credit, the number, amount and recency of your late payments, the credit used compared to the credit available, how long you’ve worked where you work and lived where you live, and of course, bankruptcy. You can increase your score by paying your bills on time, refraining from frequent credit applications and inquiries, and having a good amount-maxing out your credit has a very negative impact on your score.
FICO is an acronym, it stands for Fair Isaac Corporation, which is the most widely used credit scoring model in the US. It uses a mathematical formula developed by the Fair Isaac Corporation, and was designed to help lending institutions and other credit companies determine the risk of lending money, or issuing credit to their potential customers. Here’s how it works: Your credit report is pulled using one of the “big 3” credit reporting agencies listed below, that information is run though the FICO scoring model, and out comes your FICO credit score. Fair Isaac has also helped develop some of the credit scoring models used by the “big 3” credit reporting agencies – Experian, Equifax, and TransUnion. Although similar in design, the scoring models used by each company listed here are said to have their own unique way of determing credit worthiness, and the overall “score” of your credit. However, they still work with Fair Isaac to help develop the formula, and are all recognized as bein
