1. What is a FICO Credit Score?

The FICO score is the most widely used credit scoring model in the United States. It ranges from 300 to 850 and is calculated based on five main factors: payment history, credit utilization, length of credit history, credit mix, and new credit inquiries.

2. How Credit Score is Calculated

The calculator uses a simplified version of the FICO formula:

Where:

• Payment History (35%): Percentage of on-time payments
• Credit Utilization (30%): Percentage of available credit being used
• Length of Credit History (15%): Age of oldest account in years
• Credit Mix (10%): Number of different credit types (credit cards, loans, etc.)
• New Credit (10%): Number of recent credit inquiries

Note: The actual FICO algorithm is proprietary. This calculator provides an estimate based on simplified weighting.

3. Importance of Credit Score

Details: Your credit score affects loan approvals, interest rates, insurance premiums, and even rental applications. Higher scores (700+) qualify for better terms.

4. Using the Calculator

Tips: For best results, enter accurate information about your credit history. Payment history and credit utilization have the biggest impact.

5. Frequently Asked Questions (FAQ)

Q1: What's considered a good credit score?
A: 670-739 is good, 740-799 is very good, and 800+ is exceptional.

Q2: How often should I check my credit score?
A: At least once per year, preferably before applying for major loans.

Q3: How long do negative items stay on my report?
A: Most negative items remain for 7 years, bankruptcies for 10 years.

Q4: Will checking my score lower it?
A: Checking your own score is a "soft inquiry" and doesn't affect it.

Q5: How can I improve my score quickly?
A: Pay down balances to lower utilization and ensure all payments are on time.