The credit score, commonly referred to as a FICO score, is a proprietary tool created by the Fair Isaac Corporation. FICO’s is actually not the only type of credit score, but it is the measure that is most commonly used by lenders to determine the risk involved in doing business with you.

Due to the proprietary nature of the FICO score, Fair Isaac does not reveal the exact formula it uses to compute this number. However, what is known is that the calculation is broken into five major categories with varying levels of importance. These categories, with their weight in brackets, are:
– payment history (35%),
– amount owed (30%),
– length of credit history (15%),
– new credit (10%),
– type of credit used (10%).
All of these categories are taken into account in your overall score – no one area or incident determines it completely.

While your credit reports are simply a track record of your payment history—no judgments—your credit score is more akin to a school GPA. It’s a cumulative number that measures your success relative to others, in this case grading you as a credit-worthy individual. Click Here for details

Cliff Daniels
Realtor
Active Properties
Boulder Colorado
cliff@actprop.com