A FICO score is a type of credit score that is used by lenders to assess an individual's creditworthiness. It is a numerical representation of an individual's credit history, which is used to predict the likelihood of the individual defaulting on a loan. FICO scores range from 300 to 850, and the higher the score, the lower the risk of default.
A FICO score is calculated using information from an individual's credit report. This information includes the individual's payment history, credit utilization, credit mix, and length of credit history. This information is then weighted and combined to produce a score that ranges from 300 to 850.
There are five main factors that affect a FICO score: payment history, credit utilization, credit mix, length of credit history, and new credit.
There are a few things you can do to improve your FICO score. First, make sure you make all of your payments on time. Second, keep your credit utilization low. Third, mix up your types of credit. Fourth, don't open too many new lines of credit at once. Fifth, keep your old credit accounts open.
A FICO score is important because it is used by lenders to assess an individual's creditworthiness. A high FICO score indicates that an individual is a low-risk borrower, which makes them more likely to be approved for a loan. A low FICO score, on the other hand, indicates that an individual is a high-risk borrower and is less likely to be approved for a loan.
The consequences of a low FICO score can be significant. Individuals with a low FICO score may be denied for loans, or may be offered loans with higher interest rates. Additionally, a low FICO score may result in an individual being denied for a job or insurance.