There are a variety of non-FICO Scores available as well that some lenders and insurers (don’t forget that many insurance companies will check your credit as well and your premium may be affected by a low credit score) use to make decisions. For example, if your three FICO scores are 680, 530, and 630 your middle score is 620. Since the three scores can vary, some lenders will use the middle score (sometimes called the “representative” credit score). ![]() All of the scores, however, are developed using the same methods by Fair Isaac and have been rigorously tested to ensure they provide the most accurate picture of credit risk. The calculation is based on five categories: 1) payment history 2) amounts owed 3) length of credit history 4) new credit and 5) types of credit used.Įach credit reporting agency (TransUnion, Equifax, Experian) has a different FICO Score calculation that is determined by the information in that agency’s credit report for a specific person. The national average FICO® score has steadily risen over the years and hit a record high of 703 in 2019, so many are in the same boat. A credit score ranges from 300-850 typically, and serves as a guide to help lenders and others decide whether to do business with you. This score is based solely on information found in your credit report and ranges from 300 – 850. Its OK if you havent yet reached a 760 credit score. The FICO Score was created by the Fair Isaac Corporation and is the most widely used (90% of lenders rely on the FICO Score). When you apply for credit from a lender, chances are they will pull your FICO® Score. A low credit score could indicate a higher risk to the lender. ![]() A high credit score indicates you are a low-risk borrower (have a history of on-time payments, do not over-extend credit, and don’t have too many credit accounts). Lenders use the credit score to determine whether or not to lend to you, what the interest rate will be on the loan, and other terms that impact the cost of credit for the consumer. A credit score is an assessment of your creditworthiness.
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