subject: How Do I Check My FICO Score Online? [print this page] A simple numerical calculation showing your financial activities both in the past and currently is what is referred to as a FICO score. Financial institutions often base their judgment on this information when it comes to deciding whether or not to rate you as a potential good risk, or alternatively as a potential bad risk to their business. It is this same score that allows them make a judgment regarding whether or not you are going to make payments on time. Should you have scored highly on your credit report, then you are often spoilt for choice when thinking about the type of option to go for when applying for a loan.
How to calculate your FICO score
As mentioned earlier, the financial activities that you have been involved in, in both the past and present are the ones that are used to come up with a percentage of your score. A complex mathematical formula is used to calculate this percentage. It is important to note that there are other factors that are put into consideration when calculating this percentage score. They range from factors such as mortgages, any prior credit cards that you have had, car payments, public records, wage attachments, liens, lawsuits etc. Based on whether you have been making your payments on time, you are going to have a higher credit score, though bad records mean a bad FICO score.
Since the records are prepared by humans, it is common to come across wrong information, errors or even frauds, something that demands that you go over your report on a regular basis to deal with them. Remember that when they are overlooked, these can end up being the reason why you get a negative rating despite having practiced financial discipline. With the changing times transparency has ensured that such information has now become readily available to people. You can also obtain a copy of your free FICO score on the internet.
What is United States' average FICO score?
FICO scores are often within the 300 and 850 range, with 300 being the lowest and 850 being the most. When you trigger 300, you have a low credit score and this means that you might not even qualify for any type of loan. 850 on the other hand is the excellent credit score you can ever have and with this, you can get any type of loan you aspire to. The average American score however is 720. It also allows you to access services from lenders.
