How Your Credit Score Is Derived

Developed in 1956, a Fair Isaac Corporation Score (commonly called the FICO Score) is a three digit number ranging from 300-850 and is calculated according to the following risk factors:

Payment History (35% of score)

• Payment information on many types of accounts
• Public record and collection items
• Details on late or missed payments – specifically:
  
  
  • how late they were
  • how much was owed
  • how recently they occurred
  • how many there are

Amounts Owed (30% of score)

• Amount owed on all accounts
• Amount owed on different types of accounts
• Whether you are showing a balance on certain types of accounts
• How much of the total credit line is being used
• How much of installment loan accounts is still owed

Length of Credit History (15% of score)

• How long your credit accounts have been established, in general
• How long specific credit accounts have been established
• How long it has been since you used certain accounts

New Credit & Inquiries (10% of score)

• What kinds of credit accounts you have and how many of each
• Total number of accounts you have

Types of Credit (10% of score)

• How many new accounts you have
• How long it has been since you opened a new account
• How many recent requests for credit you have made

What It Means

Once the borrower’s score is derived, most lenders use a standard ‘grading’ system to categorize the results. While some lenders develop their own systems for classification of scores, below is a general guide of score interpretation. Used as a general reference, this can help you interpret the credit score you’ve been given based on a grading system typically used in schools:

CREDIT SCORE 670 and above 650 620 580 550 520 or below

GRADE A+ to A A- B+ to B- C+ to C- D+ to D- E

Fair Isaac Resolution Resources Helpline (800) 777-2066