FICO estimates that about 90% of lenders use its scores to help decide how much credit to extend to consumers and how much to charge them for it. Though the data analytics company renamed the company to FICO in 2009.Īs a three-decade-old credit scoring model, FICO is the most widely used scoring model 0n the market. It's named after Fair Isaac Corporation, the company that first created the numeric credit-scoring system in 1989. What is a FICO score?įICO is a credit scoring model, which reflects information on your credit report and condenses it into a single three-digit number. The three credit bureaus - Experian, TransUnion, and Equifax - each establish a credit score for consumers based on your purchase and payment history, and those scores use the FICO scoring system. Credit scores range from 300 (extremely poor, very limited credit opportunities) to 850 (excellent credit opportunities) and fluctuate based on a variety of things, such as late payments, debt-to-credit ratio, accounts in collections, the age of your credit accounts, and more. This helps financial institutions and lenders determine your creditworthiness and set interest rates or loan terms that correspond to your score. If a lender is looking at your credit score, chances are, they're looking at your FICO score. By clicking ‘Sign up’, you agree to receive marketing emails from InsiderĪs well as other partner offers and accept our
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