Fair Isaac & Co. (FICO)
What is the FICO Score and what factors are considered?
One of the most common credit scoring models is the Fair,
Isaac and Co. (FICO) score used virtually by all major mortgage
lenders to evaluate the credit worthiness of applicants. Your
FICO score is available upon request by the applicant.
The FICO score is used by many lenders as a basis for
accepting or rejecting applications and setting rates and fees.
FICO scores range from 450 to 850 points. To be considered
"A" paper, your score needs to be 670 or higher.
Below are the weights and factors assigned to different credit
history factors used for the FICO score:
| Item |
Summary |
% of Weight |
| Payment History |
Determined by the payment history on your credit card
accounts, from Visa cards to department store and loans.
The model assigns greater weight to recent missed
payments than late payments years ago. |
35% |
| Outstanding Credit |
Based on the amounts you owe creditors. This includes
the total of what you owe on all your accounts and
whether you carry an unpaid balance on certain accounts
like credit cards. |
30% |
| Length of Time |
Attributed to the length of time the applicant has
been a credit user. The longer, the better, assuming you
pay on time. |
15% |
| New Credit Loads |
Based on whether you appear to be loading on new
credit. In other words, have you been applying for and
receiving new loans in recent months. High activity in
this category will lower the score. |
10% |
| Mixed Credit Use |
Governed by the types and "mix" of your
credit use. |
10% |
