FICO® Scores - What your Credit Score Means

The following information is generalized from Fair Isaac:
FICO Scores are determined from various credit information taken from your credit score. This includes Payment history, length of credit history, new credit,
types of credit used and amount owed. There are also percentages that go along with each category. Here is a general overview of these catagories:

Payment History
•     Various payment information on accounts such as credit card bills, retail store accounts
various loans, mortgages and more.
•     Any bankruptcies, liens, wage garnishments, any suits filed against you.
•     The degree of how long overdue your payments are.

Amounts Owed
•     The amount owing on specified accounts.
•     How many accounts that you owe on.
•     The amount of credit used on credit lines.

Length of Credit History
•     How long have your accounts been active or opened.
•     Time since there has been activity on those accounts

New Credit
•     How many newly opened accounts do you have.
•     How many credit inquiries have you made recently.

Types of Credit Used
•     The number of and what types of accounts such as credit cards, storel accounts, any loans, mortgages, etc.
Please note that:
•     A credit score looks at all these categories, not just some.
    So no one factor will determine your credit score itself. However sometimes a given factor may be more important to one than another given their credit
history. This is subject to change too as your credit report changes. While your FICO score only calculates your information from your credit report, it is not
to say that lenders will will at other factors in determining a credit decision. These factors include your income and job security.
Other Names for FICO Scores
FICO scores have different names at each of the three credit reporting agencies. All of these scores,
however, are developed using the same methods by Fair Isaac, and have been rigorously tested to ensure
they provide the most accurate picture of credit risk possible using credit report data.

Credit Reporting Agency - FICO® Score
Equifax                         - BEACON®
Experian                       - Experian/Fair Isaac Risk Model
Trans Union                  - EMPIRICA®

What Does Your Credit Score Mean?
As you improve your FICO scores, you pay less when you buy on credit - whether purchasing a home
loan, cell phone, a car loan, or signing up for credit cards.
For example, on a $150,000 30-year, fixed-rate mortgage:

Your FICO® Score   Your Interest Rate

720-850
700-719
675-699
620-674
560-619
500-559

Where do you rank?

1% upto 499
5% 500-549
8% 550-599
12% 600-649
16% 650-699
19% 700-749
28% 750-799
11% 800+

Lenders will usually start considering approvals of credit and loans with scores starting in the low 500's.
However, quickest approvals and lowest interest rates are given to scores of 700 and up.

Here is a breakdown of credit scores:

•     Scores below 600 are usually considered bad credit. This may result in higher interest and down
payment as well as denial of credit.

•     Scores between 620 and 659 are good. Generally there is no problem in getting approved with fair
interest and a lower down payment.

•     Scores between 660 and 719 are considered very good. Approvals are usually guaranteed with
more favorable interest rates. Also, this score enables consumers to negotiate with creditors to find
the best deals.

•     Scores of 720 and above are considered excellent. Consumers usually get the lowest available
interest rates with no money down and no employment verification.

What Is The Importance Of The Middle Score
When purchasing property, mortgage lenders look at the safe average of your creditworthiness by pulling
your credit report from all 3 credit bureaus. Then they will look at the middle credit score of the three.
For example, if your Equifax score is 599, your Trans Union score is 623 and your Experian score is 613,
lenders would go by your Experian score of 613 which is your middle score. So if you are in the market
for property, you may want to concentrate on your middle score.