What Is A FICO Credit Score? A FICO score is part of your credit even though most people don’t know what it means. The higher the number, the better your risk level when talking to lenders.When you apply for credit - whether for a credit card, a car loan, or a mortgage - lenders want to know what risk they’d take by loaning money to you. FICO scores are the credit scores most lenders use to determine your risk. You have three different scores, one for each of the three bureaus: Experian, TransUnion, and Equifax.
Each score is based on information the credit bureau keeps on file about you. As this information changes, your scores tend to change as well. They affect both how much and what loan terms (interest rate, etc.) lenders will offer you at any given time. Taking steps to improve it can help you qualify for better rates from lenders.
For your three FICO scores to be calculated, each of your three credit reports must contain at least one account which has been open for at least six months. In addition, each report must contain at least one account that has been updated in the past six months. This ensures that there is enough information - and enough recent information - in your report on which to base it on.
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