What Is A FICO Score?

Your FICO score or credit score as it's commonly called is a very important calculation that can control whether or not you are eligible to receive credit and if eligible the terms you can receive credit under. Failure to understand the impact this score can have on you future purchasing power and lifestyle can be disastrous. This article will break down all the information you need to know regarding your FICO score.

As I mentioned above the FICO score is a numerical score that is based on your financial history as collected in your credit report. Creditors can use this number to evaluate whether or not you are able to pay a loan back on time. The higher the score the more likely you are to pay off a loan on time and the less of a credit risk you pose.

The FICO or credit score ranges are broken down as follows:

720-850 - This represent the best score range

700-719 ? Able to obtain favorable financing terms

675-699- This is still a decent score range

620-674 ? May have trouble obtaining favorable credit terms

560-619 ? May have trouble obtaining credit

500-559 ? Time to improve your score

Your credit score is broken down into 5 distinct categories each with their own importance based on a percentile. The 5 categories and the percentage they represent I relation to your credit score are as follows:

Payment History ? 35%

Amounts Owed ? 30%

Length of Credit History ? 15%

New Credit ? 10%

Types of Credit Used ? 10%

Your payment history contains information on credit cards, retail accounts, installment loans, finance company accounts and any mortgages you may have had. It also details any past due accounts and the amount owed on hem. You will also find bankruptcy information as well as other adverse information in regards to your credit history. This is why it warrants a 35% piece of the pie.

Your amount owed is generally speaking the amount owed on any accounts you currently have and number of accounts with balances. Note that it has a large impact (30%) on your credit score. The length of your credit history details when accounts were opened and the last activity on those accounts. New credit shows the number of recently opened accounts by the type of account and number of account inquiries. Finally the type of credit used is a snapshot of what types of financing you have held.

Other information that is included in your credit report but has no bearing on your FICO score includes your race, age, where you live and your sex and employment information. Although the FICO score doesn't use these factors the employment information may be used by other companies and creditors to help in their decision making process.

There are three major credit-reporting agencies - Equifax, Experian and TransUnion that have your credit information on hand. Each of these credit bureaus maintains their information separately, which can cause the financial data to be slightly different among the three of them. Most experts agree that in order to get the best snapshot of your financial history and credit worthiness it is a good idea to request a report from each of the reporting agencies. It is also highly recommended that you actually review your credit report once a year in order to identify and correct any errors before they cause any future potential problems when you apply for credit. Recent changes in the laws no allow for consumers to request 1 free credit report each year in order to look for any such errors.

Here is the contact information for each of the three reporting credit bureaus:

Equifax: (800) 685-1111, www.equifax.com
Experian: (888) 397-3742, www.experian.com
TransUnion: (800) 888-4213, www.transunion.com

As you can see your FICO Score is a very important number that represents your financial trustworthiness in the eyes of creditors. Failure to properly monitor it could cause you future headaches when it comes time to apply for any form of credit.

Timothy Gorman is a successful Webmaster and publisher of Debt-Relief-Solutions.com. He provides more debt relief, consolidation and credit repair information that you can research in your pajamas on his website.

---

What the Mail on Sunday Said

Anyone considering Bankruptcy may have experienced fear after reading an... Read More

Can You Escape the Trap of Ever Growing Debt?

It's difficult not to be concerned when facing numbers like... Read More

Debt Negotiation and Debt Settlement

Debt negotiation and settlement can give you a drastic reduction... Read More

Debt Problems? You Can Negotiate With Your Creditors

It is always possible to negotiate with creditors ? even... Read More

Going Bankrupt in the World

It all starts by defaulting on an obligation: Money owed... Read More

Budgeting and Debt Management

Debt management (specifically unsecured) is the first step to taking... Read More

Repair Bad Credit Yourself

In March 2005, the U.S. financial services industry succeeded in... Read More

The Credit Card Debt Termination Scam

"Legally terminate credit card debt! You can be debt-free in... Read More

Is There A Way Out Of Your Debt Problems?

Do you have multiple debts? Do you have just one... Read More

Why You Should Get Out of Debt Today?

The main reason for getting out of debt today, is... Read More

Credit And Debt Relief--A One Stop Solution

Amy Wright, 34, was extatic when her realtor showed her... Read More

Debt Free Living - 5 Tips To Get Out Of Debt

A few times I wonder what sort of credit system... Read More

The New Bankruptcy Law -- How Will It Affect Debt Negotiation?

In April 2005, Congress made sweeping changes in U.S. bankruptcy... Read More

Hide That Car! Fighting the Repo Man

Vehicle repossession may appear justified in circumstances where a person... Read More

How to Negotiate Debt Settlement

People over extend themselves financially as a result of a... Read More

How to Get Triple A Credit in 25 Days

Good credit is everyone's dream. A wise use of credit... Read More

Dealing with Thingitis

Debt is quickly becoming an epidemic in America. However, through... Read More

How to Get Money When You Are Broke

(Money You Don't Have to Pay Back) 1. One way... Read More

Bankruptcy - The Easy Option?

Incredibly, since the changes in the bankruptcy law in April... Read More

What Are The Benefits and Consequences Of Getting Rid Of Debt The Easy Way

We have all experienced getting so far in debt we... Read More

Utah, the Nation?s Bankruptcy Capital

Congress recently passed the Bankruptcy Abuse Prevention and Consumer Protection... Read More

Pay Off Your Student Loans and Reduce Your Debts

Financing a college education is one of the more expensive... Read More

Five Major Ways to Save Money

There are two main roads to improving your personal finances:... Read More

IVA: Individual Voluntary Arrangement

What Is an IVAThe IVA (Individual Voluntary Arrangement) was introduced... Read More

Personal Bankruptcy ? If Its Unavoidable, File Now

The Bankruptcy Abuse and Consumer Protection Act, signed into law... Read More

Bankruptcy: What You Need to Know

Personal bankruptcy is a legal way to give people with... Read More

The ONE Law You Should Be Breaking

There is a law all smart people break.Parkinson's law.Parkinson's law... Read More

Debt and Your Dreams

You may not realize what that credit card bill is... Read More

Debt Settlement : What You Need To Know

Debt Settlement companies work with your creditors to help you... Read More

Credit Counseling or Bankruptcy: Which is Best for You?

People often get to a place where they simply can't... Read More

Bankruptcy Reform: Designed to Protect Big Business

Who will benefit from the new bankruptcy reform laws? The... Read More

Corporate Debt Management ? Perspective on the Why

Entrepreneurs have a tough time in their formative years. They... Read More

Credit Repair? Its All Up to You

Log onto to a search engine such as google.com and... Read More