The primary, but not the only users of your credit score are the lenders. But if you are applying for a job, some employers, and other businesses also consider the credit score in evaluating their applicants. Aside from credit application, credit scores are also used for various purposes. Hence, it is really important that you know how to get your FICO score.
FICO score and other types of credit scores are computed by employing scoring models and by consulting mathematical tables that have assigned points for various pieces of information that best foresee your credit performance in the future.
Calculating your FICO Score
The formula employed in getting your FICO score contains information that is based on various important factors. The 35% of your FICO score is based on your payment history. All lenders want a to know your credit history which includes your payment history on various accounts such as retail accounts, credit cards, finance company accounts, installment loans as well as mortgage loans. Public records and collection items such as bankruptcies and judgments are also included in your payment history.
Your outstanding debt comprises 30% of your FICO score. Of course, lenders will ask about your present indebtedness level because it will determine if you can pay the amount you are borrowing and still afford to pay for other current bills.
15% of your FICO score is based on the length or duration of your credit history. In general, the longer your credit history, the better your credit score is. The pursuit of new credit makes up 10% of your credit score. Before approving your loan, the lenders want to find out how many credit accounts you? Ve opened and applied for. Generally, the fewer credit accounts you have, the better. The remaining 10% of your FICO score depends of your credit experience. The types and the number of accounts you have such as credit cards, mortgage, retail accounts and others can really make a difference.