What is a FICO score?

FICO is the acronym for the Fair Isaac Corporation, which is a private corporation that publishes the popular and widely used credit score model in the United States. The FICO Score is calculated statistically, with information from a person’s credit information. A FICO score shows the likelihood that a borrower will default on a loan or a credit obligation. Although all but a few people actually know what components make up a FICO score, it is a generally accepted proposition that the following components are used to make up a FICO score:

• 35% — Timeliness of past payments (only includes payments later than 30 days past due);
• 30% — The amount of debt versus credit ratio;
• 15% — Length of credit history;
• 10% — The types of credit used;
• 10% — Recent application or searches for credit and/or amount of credit obtained.