Whats a FICO score (credit score)?
A FICO score is a numerical value created by “risk assessors” to predict the payment patterns of a consumer. The score is a mathematical formula that is derived based on the information contained in a credit report. No one knows the “formula” of the FICO score except for a handful of people over at Fair Isaac Corp, who is the creator of the FICO score. Credit scores help lenders make decisions quicker so the lender does not have to scrutinize a credit report in detail to see if an applicant is too much of a credit risk. FICO scores range anywhere from roughly 300 to 850. A high credit score leads creditors to believe that an applicant is a low credit risk, which qualifies the person for better rates and terms. A low credit score can cause unfavorable terms for an applicant, or even deny the applicant entirely.
