Your FICO®credit score is calculated based on a number of factors, including the amount of debt you already owe, your payment record and the length of your credit history. Your credit score can affect your ability to take out loans, rent or buy a home. It's important to maintain a good credit score.
What are FICO® Scores?
FICO® Scores are numbers that summarize your credit risk. Scores are based on a snapshot of your credit file at particular consumer reporting agency at a particular point in time and help lenders evaluate your credit risk.
How are FICO® Scores calculated?
FICO® Scores are calculated from many different pieces of credit data in your credit report. This data is grouped into five categories as outlined below. The percentages below reflect how important each category is in determining how FICO® Scores are calculated:
FICO® creates different FICO® Score models to work with each credit bureau's credit reports. And, FICO® periodically releases new FICO® Score models to incorporate changing consumer behavior, new regulations and technological advances. Because not all lenders and businesses use the same scoring models or versions, you may have several credit scores.
For a score with a range between 300 and 850, a credit score of 700 or above is generally considered good. A score of 800 or above on the same range is considered to be excellent. Most consumers have credit scores that fall between 600 and 750. In 2020, the average FICO® Score in the U.S. reached 710—an increase of seven points from the previous year. Higher scores can make creditors more confident that you will repay your future debts as agreed.
Please consider the Myers Team your resource for all things real estate. We have over 30 years of real estate experience, specializing in (but not limited to) the Montgomery County area. If you are refinancing, want a recommendation on a home warranty, need a service or just have a home related question, please give me a call at 301-910-9910 or email me at email@example.com.