FICO Credit Score – How to Find / Calculate FICO Score

What does FICO credit score means

fico-credit-scoreIf you are seeking a loan, from loan or mortgage companies you might sometimes be wondering that how does the lenders actually decide whether you are eligible for getting the loan or not.

Most of the lenders, such as banks and credit card companies use various types of credit scores to determine an applicant’s eligibility for getting a loan. They actually rely on some parameters, usually termed as Credit Scores, that determines the trustworthiness of the applicant. One of the most common credit score is FICO credit score, which is calculated by a specialised software which is developed by Fair Isaac and company.

How the lenders calculate FICO score

The software developers do not reveal the exact formula used for calculating the FICO score. But it is widely believed That the FICO score depends upon the following facts about the borrow seeker:

  1. The length of the time period for which the applicant has been in his current job
  2. The length of the time period for which the applicant has been living at his current address
  3. The length of the time period for which the applicant has been taking loans
  4. The number of credit cards that the applicant keeps with him
  5. How many times the applicant has made late payments on his credit accounts
  6. Has the applicant be able to completely free of any loan in past
  7. What is the total debt you carry at present
  8. How much credit is available to you at present

These are only some of the factors that might affect your credit score. There may be some more parameters, which might finally determine your FICO credit score. You should also understand that the amount for which you qualify for getting the loan also depends upon the type of loan or mortgage you are seeking apart from your FICO score.

Normal FICO credit score ranges

It has been seen that the range of the FICO credit score TVs in the range from 300 to 850 with almost 60% of the people following in the range from 650 to 799.

The borrowers should understand that the FICO credit score is a fluid parameter. It only represents your credit worthiness at a given point of time and will vary from time to time as new information is appended to your credit profile. A new job, an increase in your pay check, default on one or two credit card payments et cetera could make a lot of difference in your FICO credit score and might cause for a difference with the rejection and an approval of the loan.

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Lots of approximations and assumptions have been made while developing the calculators.

Please make your own calculations before making any financial decision.