Question: What is a credit score?
Answer: A credit score is a formula designed to give creditors a quick look at an individual’s credit history to determine how much risk is involved in making a loan or other credit outlays to the individual.
Question: What are credit scores based on?
A credit score is based on factors such as loans, credit cards, and other credit obligations. Public records such as tax liens, bankruptcies, judgments, law suits and collection accounts are also factored into the score.
Question: What is a “FICO” score?
Answer: The FICO scoring system is probably the most widely used of the mathematical formulas designed to score credit. Most banks, savings and loans, credit unions, credit card companies and other lenders use it when making a decision to issue credit. The FICO scoring system was developed by Bill Fair and Earl Issac of the Fair Issac Company.
Question: What is the range of a FICO score and what determines how high or how low a FICO score is going to be?
Answer: A FICO score ranges from 300 to 850 and the higher the score, the better your credit is considered to be. Most lenders use a score of 700 or higher for consideration of their best rates and terms.
As stated above, there are many factors used to determine what a credit score is going to be. Some of the most determining factors are your payment history on loans or credit cards, your income, how much debt you have, how long you’ve been had credit, the types of credit you have and whether you have applied for credit recently. on the
Question: How do I keep my credit score high enough for it to be considered good?
Answer: The most important thing to do is to make your monthly payments on time. Your payment history makes up a large percentage of your credit score and even one late can make a big negative impact on your overall score. Try to avoid collection accounts, chargeoffs, repossessions, bankruptcy and unpaid liens because any one of these actions can cause your credit score to sink to it’s lowest standing.