FICO® Score

FICO® Score is a Credit scoring model developed by the Fair Isaac Corporation (FICO) that lenders use to assess an individual’s Credit risk. The score ranges from 300 to 850, with higher scores indicating better Creditworthiness. It is calculated based on several factors, including payment history, amounts owed, length of Credit history, types of Credit used, and new Credit inquiries.

Examples:

• A borrower with a FICO® Score of 750 may qualify for lower Interest Rates on loans and Credit cards, as they are considered a lower risk to lenders.
• A consumer with a score of 600 might struggle to secure a mortgage or could face higher Interest Rates due to perceived higher risk.

Cases:

• Case 1: John has a score of 820, which allows him to secure a car loan with an Interest Rate of 3%. This reflects his strong payment history and low Credit utilization.
• Case 2: Sarah has a score of 580 due to missed payments and high Credit card balances. She is likely to receive loan offers with higher Interest Rates, if any at all.