Free FICO Credit Score Online
Your FICO score is a three digit number which is also known as your credit score. This is calculated according to your past and current financial activities. This figure is used by lenders to determine the risk that you present to them when they offer a loan or lease to you. A higher score is good for you as it means that you have a good track record of paying your bills on time, and lenders will offer you better interest rates and terms.
How Is My FICO Score Calculated?
Data that is found on your credit report is used to come up with the number. This is a record of all your financial activity. All this is entered into a complicated mathematical formula which gives a number that is between 300 and 850. Some of the factors that are put into consideration are: number of credit inquiries (10%), length of credit history (15%), types of credit (10%), debt ratio (30%) and payment history which is 35%. There are many mistakes and errors that are usually documented in the credit reports and thus you have to be very careful and go through your report so that you can spot the errors that have been made. These are usually very bad as they have a negative effect on your report. These form around 80% of the credit report entries. You should therefore make sure you go through a copy of your report at least once a year so that you can be sure everything is okay.
What Is The Average US Credit Score?
The lowest credit score one can get is 300 while the highest you can get is 850. This means that your score will be somewhere between these numbers. Getting a score that is on the extreme is usually difficult as most scores usually lie in the middle of the two scores. The average us score is 720. This means that if you have a score of 700 and above you are on the safe side as you will get the best rates on mortgages and loans. It also implies that if you have a score of less than 600 you are likely to get unfavorable terms. You should always keep in mind that the FICO rating is one of the 3 major credit rating systems that are used in the US. You should use a service that offers you the three options; this will give you more insight on your credit standing.