Free FICO Score Online
Your credit score, which is commonly referred to as your FICO score, comprises of a number of three digits which is based on your past and current financial activities. The score basically is needed to show any prospective lenders the risk that you purpose when borrowing money. The greater your score, the greater the reliability to the financial firms you appear, as you have a better track record of making your payments on time. So what exactly is your score and how can you get it for free?
How Is My FICO Score Calculated?
The FICO score depends on the data present in your credit records. It is the report of all the present and past financial activities. The entire information is logged in a particular mathematical formula, which forms a three digit number that is between 300 and approximately 850. The calculation involves the following important factors: Some Credit Inquiries (10%), Types of Credit (10%), Credit History Length (15%), Debt ratio (30%) and Payment History (35%).
However, it is difficult to scan the copy of this credit report because it is possible to have many wrong entries which can create a negative impact on the credit ratings. There are about 80% credit reports that have incorrect, outdated information, fraud and error entries. Hence, keep in mind all these issues and always check the credit report history every year.
What Is The Average US Credit Score?
The range of FICO score varies from 300 to 850, which has 300 as the poorest credit score and 850 to be considered as the best possible credit score. However, having scores at the extremes is very difficult but middle range scores are quite possible. The average US credit score is found to be approximately 720. The general thumb rule tells that the credit score of 700 and even more gets the maximum terms on mortgages and loans and interest rates. Whereas those having credit score of 600 or even less would generally get good interest rates with restrictive loans.
However, it is very essential to know that the FICO rating plays a major role in the three vital credit rating systems presently used in US. If you are planning to request for the credit score, try to make use of the service which offers all the three credit rankings. All this will make you understand on where your credit lies in the eyes of credit card companies, banks and lenders.