What is a FICO Credit Score?(free credit score online)

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Credit scores have been used by lenders to evaluate how well a person handles credit for over fifty years. The first credit scoring system was developed by the Fair Isaacs Corp, which is still used today and viewed as the industry standard. However, a number of other private companies, including each of the Credit Reporting Agencies, have developed their own credit scoring system, but none are viewed in as high of regard as the Fair Isaacs Corp Credit Score currently is.

The Fair Isaacs Corp Credit Score, which is usually referred to as a FICO score is a numeric value that is based off of information in a person's credit reports. While it is required by law that each credit reporting agency provides an individual with a free copy of their credit report every year, this is not the case with a FICO Score. Instead, it is necessary to purchase your FICO score, which should cost at most $16.

FICO Scores are based on a scale between 300 and 850, with a credit score of 300 being the worst and 850 being the best. According to the Fair Isaacs Corp, credit scores that are between 760 and 850 are ideal. Everyone who has had an open line of credit for at least six months will have a credit score, providing the line of credit has been updated at least once since it was opened.

Fair Isaac Corp has stated that they base credit scores off of the information on a persons credit report, but that the persons actual debt load only accounts for about 30% of their credit score. Instead, the majority of a persons credit score is based off of how good their payment history is, as well as the proportion of their debt to their credit limits. As a result, maxing out a credit line is usually viewed as worse than having a lot of debt.

In addition to a persons payment history, which includes the number of delinquent payments and number of on time payments, a number of other information is used to generate a credit score. This includes any negative legal judgments or actions, such as lawsuits, liens, bankruptcies, and wage adjustments. The amount of time since these judgments and how many items have been sent to collection agencies are also included in a credit report.

The types of credit lines a person has open are also important considerations when generating a credit report, as is the length that each of these credit lines has been open. New credit and recent credit inquiries also play a part in a persons FICO score, as do how long a person has been receiving good credit, after a period of delinquency.

There are a number of other factors considered by the Fair Isaacs Corp when calculating a persons credit score. Since this information is garnered from a persons credit report, it is essential to regularly check ones credit report for errors and fix any errors as soon as they develop. This is because an error on your credit report can have a very negative impact on your credit score.

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