When you apply for credit – whether for a car loan, a credit card, or a mortgage – lenders want to know what risk they’ll be taking by loaning you money. The tool most lenders use to determine your risk? Something called a FICO® score.
You have three FICO® scores – one for each of the three credit bureaus… Experian, TransUnion and Equifax.
Each score is based on information the credit bureau keeps on file about you. As the information changes, your credit score also changes.
Your FICO® scores affect the amount lenders will loan you as well as the loan terms (such as the interest rate). Scores range from 300 to 850 – with 850 being the highest – and 713 being the average FICO® score.
Your score is determined by your history with other loans and credit cards. It factors in your payment history, amounts owed, the length of your credit history, and the amount of your available credit that you are currently using.
The higher your FICO® score, the more likely it is that you’ll be approved for a loan – and at the best rates.
