What is a Credit Score?

A credit score is a number generated by a mathematical formula that is meant to predict credit worthiness. The most common of the credit score standards is the FICO score created by Fair Isaac. The FICO score ranges from 300-850 and is intended as a predictor of whether or not you will be 90 days late on a loan obligation.

Fair Isaac uses thousands of credit reports to calibrate the FICO scoring model and is very secretive of the exact formula.

Here is a percentage breakdown of a FICO score:

• 35% - Payment History
  
• 30% - Debt Ratio
  
• 15% - Length of Credit History
  
• 10% - Types of Credit
  
• 10% - Number of Credit Inquiries