What is a FICO score and what affects this score?

FICO score

Having an excellent score affects your ability to borrow money either now or in the future. This is why most individuals and businesses are always attempting to keep the figure as high as possible by taking every recommended step.

The FICO score is used in the United States. Fair, Isaac and Company created this score using numerous factors to determine the creditworthiness of individuals. As we are going to see below, many factors come into play before generating a specific figure. But one thing to know is that the figure fluctuates up and down depending on your financial behavior in relation to set parameters. Check out these factors that will affect your FICO score so that you can start working on them.

Utilization of Credit

The majority of people in current society use credit cards. Actually, those who use more than one credit card are a greater number than you might imagine. Businesses are not left behind either. But how one utilizes credit directly affects the FICO store. If you want the number to increase, you must reduce credit card use. Those who are near their credit limits look like they are irresponsible in handling debts. But the worst mistake to commit is to default on making monthly repayments.

Obtaining New Credit

This is closely related to managing your acquired credit cards, but it is treated differently. If you remember, many people have more than one credit card. Opening a new credit card will boost the FICO score immediately. But in order for this to happen, there must be a gap of time between when you opened your new credit line and the last one that you opened previously. If multiple accounts are opened at the same time, FICO will think that you are struggling financially and consequently bring your score down. Again, this may strain you financially because of making payments on numerous credit cards that have just been acquired.

Payment Behavior and History

You have loans and bills to pay every month. FICO will dig deeper into your records to know the long-term payment history. According to experts at trade line companies, over 30 percent of the credit score is determined by how one makes these payments. They will even use this data to estimate your ability to make repayments. So, be sure that you are making timely payments on all your loans, bills and other tradelines at all times.

Length of Credit History

Each tradeline is checked individually since the day it was opened to establish how it has been faring. FICO is thorough in what they do because they have all the resources to monitor these tradelines. The longer the credit history, the better the score one will get. However, the credit history must be good to have a positive impact on your score.


From all this information, it is clear that FICO has a significant impact and is very useful. It is easy to monitor and maintain these parameters at all times. Together with all other tips for boosting a credit score, you now have more information to succeed in your credit score improvement efforts.

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