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What Is A High FICO Credit Score? If, after looking at your FICO grades, your most recent score has you as an A credit instead of an A+ credit, you should expect to be borrowing money in the near future, as that will improve your score. You might try downloading the booklet "Understanding your FICO score" and see if you can use any of the tips presented in the booklet to raise your score. http://www.myfico.com/crediteducation/brochures.aspx#uycs “This booklet provides a thorough description of credit scoring, including ways credit scoring can help you, the relationship between your credit report and your credit score, what a FICO® score considers, and interpreting your score.” 
Let's say you want a thirty-year mortgage loan and your FICO credit score is 720. You might qualify for a mortgage with a low 5.5 percent interest rate*. But if your scores are 580, you’d probably pay 8.5 percent* or more -- that's at least 3 full percentage points more in interest. On a $100,000 mortgage loan, that 3-point difference will cost you $2,400 dollars a year, adding up to $72,000 dollars more over the loan's 30-year lifetime. So, credit scores do matter.
*Interest rates are subject to change, particularly during volatile times; those figures are just given as examples. So, Then, What is a Good FICO Credit Score? When lenders talk about "your score," they usually mean the FICO® score developed by Fair Isaac Corporation. That’s today's most commonly used scoring system. FICO scores range from 300-850, but most people score in the 600s and 700s (and higher FICO scores are better). Lenders buy your FICO score from three national credit reporting agencies (also called credit bureaus): Equifax, Experian and TransUnion. In the eyes of most lenders, FICO credit scores above 700 are very good and a sign of good financial health. FICO scores below 600 indicate a high risk to lenders and could lead lenders to charge you much higher rates or turn your credit application down. Five Parts to Your FICO Credit Scores As a rule, credit scores analyze the credit-related information on your credit report. How they do this varies. Since FICO scores are frequently used, here is how these scores assess what is on your credit report. 1. Your payment history – about 35% of a FICO score Have you paid credit accounts on time? Negative items, such as late payments, bankruptcies, and other negative items, can hurt your credit score. A solid record of on-time payments helps your score. 2. How much do you owe? – about 30% of a FICO score FICO scores look at the amounts that you owe on all accounts, as the total number of accounts with balances indicate how much of your available credit you’re using. The more you owe compared to your credit limit, the lower your score will be. 3. Length of your credit history – about 15% of a FICO score Although a longer credit history increases your score, you can still get a high score even with a short credit history if the rest of your credit report shows responsible credit management. 4. New credit – about 10% of a FICO score When you’ve recently applied for or opened new credit accounts, your credit score will weigh this fact against the rest of your credit history. Thus, FICO scores distinguish between a search for a single loan and a search for many new credit lines, depending upon the length of time over which inquiries occur. If you need a loan, do your rate shopping within a focused period of time, such as 30 days, to avoid lowering your FICO score. 5. Other factors – about 10% of a FICO score Several minor factors also can influence your score. For example, having a mix of credit types on your credit report – credit cards, installment loans such as a mortgage or auto loan, and personal lines of credit – is normal for people with longer credit histories and can add slightly to their scores. Get Your 3 Free Credit Scores For $0 |
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