Developed in 1956, a Fair Isaac Corporation Score (commonly called the FICO Score) is a three digit number ranging from 300-850 and is calculated according to the following risk factors:
Payment History (35% of score)
- Payment information on many types of accounts
- Public record and collection items
- Details on late or missed payments – specifically:
- how late they were
- how much was owed
- how recently they occurred
- how many there are
Amounts Owed (30% of score)
- Amount owed on all accounts
- Amount owed on different types of accounts
- Whether you are showing a balance on certain types of accounts
- How much of the total credit line is being used
- How much of installment loan accounts is still owed
Length of Credit History (15% of score)
- How long your credit accounts have been established, in general
- How long specific credit accounts have been established
- How long it has been since you used certain accounts
New Credit & Inquiries (10% of score)
- What kinds of credit accounts you have and how many of each
- Total number of accounts you have
Types of Credit (10% of score)
- How many new accounts you have
- How long it has been since you opened a new account
- How many recent requests for credit you have made
What It Means
Once the borrower’s score is derived, most lenders use a standard ‘grading’ system to categorize the results. While some lenders develop their own systems for classification of scores, below is a general guide of score interpretation. Used as a general reference, this can help you interpret the credit score you’ve been given based on a grading system typically used in schools:
CREDIT SCORE - GRADE
670 and above - A+ to A
650 - A-
620 - B+ to B-
580 - C+ to C-
550 - D+ to D-
520 or below - E
