FICO® Scores tell a lender how big of a credit risk you might be, and how likely you are to make timely payments if you’re granted a form of a credit, such as a credit card, mortgage, or personal loan.
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How are FICO® Scores Determined?
Most banks and lenders use FICO® Scores as their primary way to make credit issuing decisions. It takes several factors into account when determining what your score is, including:
- Payment history. Late payments on any account can adversely affect your score. If you have a credit card you're trying to stay current on, be sure to at least make the minimum payment every month.
- Debt relative to credit limits. This is how much of your available credit you're currently using. For the purposes of keeping a strong FICO® Score, keep this number below 30%.
- Age of credit accounts opened. Have you had several credit accounts opened for a long time, or just one or two for a few months? Making timely payments on an account you've had open for a long time can definitely improve your score.
- Recent credit applications. Try not to apply for several lines of credit or credit cards in a short amount of time. A “hard inquiry” showing up on your credit report will ding your score almost immediately, in some cases. If you apply for a new credit card, for example, it's a good idea to wait six months before applying for another – even if your application is denied.
- Having more than one type of credit. If you have an installment loan (such as an auto loan or mortgage) and revolving credit (like a credit card), this can actually help your score.
Understanding Your FICO® Score
FICO® Scores range between 300 and 850. For most lenders, anything above 700 is considered good to very good, and should help to qualify you for a mortgage or car loan. In contrast, a score below 620 can make it extremely hard for the borrower to find credit at decent rates.
To calculate scores, the breakdown by each category goes like this:
How to Check Your FICO® Score
You can request a free copy of your credit report at this website. Or, you can check your FICO® Score within Online Banking or the BECU mobile app. In Online Banking, just click the link in the far-right corner of the dashboard that looks like this:
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FICO is a registered trademark of Fair Isaac Corporation in the United States and other countries
BECU and Fair Isaac are not credit repair organizations as defined under federal or state law, including the Credit Repair Organizations Act. BECU and Fair Isaac do not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating.