FICO Credit Score

Each time you ask a creditor to lend you money for anything from a home, to a car, to a line of credit, the creditor will request your FICO credit score from one or more of the three credit bureaus. This is a three-digit number by the Fair Isaac Company that represents all of your credit history. It includes the good and the bad stuff and is assigned a special number. From this score, creditors can decide how much of a risk they will be taking by doing business with you. They may decide to approve you even with a lower score, but will usually charge an unusually high interest rate to protect their risky decision.

FICO Credit Report Rating

Your score is derived from your personal payment history, the amounts you owe to your lenders and how long you’ve had credit in your name. It is this mix of credit information that is calculated and rolled into one number that potential new lenders will use to evaluate the risk they would be taking by doing business with you.

What is a Good Credit Score?

The range of FICO credit scores is from 300 to 850. A score of less than 620 is generally considered high risk. Anything over 720, however, is considered good and it will get you the best interest rates because you are in the low risk category. There are some things you can do to improve your score if it is not working for you in getting accepted by new lenders.

Improving Your Score

Being selective about asking for credit is one way to keep your score in check. Too many inquiries on your credit report will send a red flag to potential lenders. You should also pay down your credit card balances. A good credit ratio is one that has unused credit potential.