In the simplest terms your credit score is your credit history calculated in figures. There are many methods which can be used to calculate your credit score but the most common method is the FICO. FICO was developed by the Fair Isaac Company and is the preferred method used by most lending companies. Your credit score determines whether a lender will approve your application or not or whether a lender will give you less rates on your payments or not.
Credit scores or FICO scores generally range form a low of 340 to a high of 850. Ideally, you should aim for a score of at least 700 or more. If you get a score of 600 and below, creditors will likely consider you as a high risk borrower.
Knowing how your credit score or your FICO score is calculated will help you become more aware of your spending and your payment habits. Let’s consider the break-down of categories used to sum up your credit score.
Read More About What Comprises Your Credit Score
1 comment on What Comprises Your Credit Score
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unlimited
said 9 months ago
Excellent! Can I pass this along?
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