FICO is the most commonly used credit score today and is named after the company that developed it, Fair Isaac Corp.   FICO scores range from 400 to 900 and the lower the score, the great the risk of default.  credit score

FICO score consists of the following components:

  • 35 percent of the score is determined by payment histories on credit accounts.

  • 30 percent is based on the amount of debt outstanding with all creditors.

  • 15 percent is produced on the basis of how long the borrower has been a credit user.

  • 10 percent is comprised of very recent history and whether the borrower has been actively seeking loans or credit lines in the past months.

  • 10 percent is calculated from the mix of credit held, including installment loans (car loans), leases, mortgages, credit cards, and so on