Aug 27 2019

FICO Score Chart #mastercard

#credit score

Credit Score Range

FICO Score Chart

A lot of people are interchanging the term FICA score with FICO Score.  Many people misspell and mix up FICA and FICO. But there’s a big difference between the two.  Let me show you.

Firstly, there is no such term as a FICA score. Although FICA does exist, it is the abbreviation for Federal Insurance Contribution Act. it has nothing to do with FICO and credit scores.

FICO, on the other hand, is the abbreviation for Fair, Isaac and Company, the company that first started credit scoring system in 1958 and used widely today to evaluate a borrower s credit worthiness.

Understanding FICO Score

Now that we re clear with the confusion between the two. What exactly is a FICO score? What is a Good FICO score?

FICO score is a 3-digit numerical index which represents an estimate of your financial credit worthiness. It is the most important number lenders used to determine who qualifies for a loan, at what interest rate, and to what credit limits.

It is based on a subset of the information in your credit report, typically from the three major American credit bureaus: Equifax. Experian. and TransUnion. Though the scoring system used by all three credit bureaus are different but all point to one conclusion and that is whether or not you have good or bad credit.

Creditors or lenders, such as banks and credit card companies, primarily use FICO scores to determine credit limits and interest rates every time when you apply for new credit card, mortgage, auto loan, personal credit line or any other credit issues by the bank. This scores have proven to be very predictive in assessing the creditworthiness of a person or the likelihood that person will pay his or her debts.

FICO Score Chart

FICO score ranges between 300 to 850. The higher is your credit score is, the lower the risk is to the lenders and the easier you’ll obtain a loan, so to speak. A low score, such as 500, could result in much higher interest rates or having your application rejected outright. Conversely, those with a credit score of 760 – 850 would get the most favorable interest rates.

The following FICO Score Chart may help you to determine where your score is in relation to others.

Written by CREDIT