FICO score

A FICO score is a numerical representation of an individual's creditworthiness, calculated by credit bureaus using statistical analysis of credit information. It helps lenders assess a person's ability to pay bills. Responsible credit use and timely payments generally result in high scores, leading to lower interest rates. Conversely, irresponsible credit use can lead to low scores, often associated with higher interest rates or difficulty obtaining credit.1

The FICO score formula weighs five key areas: payment history (35%), credit utilization (30%), length of credit history (15%), credit mix (10%), and new credit (10%). Maintaining a good credit score, typically 670 or higher, provides access to better loan terms and interest rates.23