What is a FICO score?

by marion.bernhard , in category: Banking and Credit , a year ago

What is a FICO score?

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1 answer

by roderick_marquardt , a year ago


A FICO score, often referred to as a credit score, is a numerical representation of an individual's creditworthiness. It is calculated based on the information found in their credit report, which includes details of their credit history, payment patterns, debt levels, and any potential derogatory marks such as late payments or bankruptcies.

FICO scores range from 300 to 850, with a higher score indicating better creditworthiness. Lenders, such as banks and credit card companies, use these scores to assess the risk of lending to individuals and determine the terms of loans, interest rates, and credit limits.

The FICO scoring model was developed by the Fair Isaac Corporation (FICO) and is widely used in the United States. Other countries may have different credit scoring models, but the basic concept of assessing creditworthiness remains the same.