There are lots of free websites you can go to in order to calculate your FICO score. Your FICO score brings out the important information in your credit report to see if you are a well-qualified buyer. FICO is simply one way to determine a credit score, and it is one of the most common ways. In this measurement, they take into account the important factors of your credit, so if you have a good FICO score that reflects you very well.
Like previously stated, you can go to many different websites to calculate your credit score, but it is important to know what makes up your credit score because that way you can look to improve it in order to get better financing options and lower interest rates.
What Makes Up a FICO Score
A FICO score is made up of 5 categories. These categories include Amounts Owed, Payment History, Credit Mix, Length of Credit History and New Credit.
The weight of these categories may vary a little bit depending on how long you have been using credit. However, generally Payment History is worth 35% of your total score and it is based on your history paying back debt. The Amounts Owed generally takes up 30% of your FICO score and that is determined by the amount in total that you owe. Just because you owe money does not mean you will be high-risk for making payments, but the FICO looks into how much you owe all-around.
The last three categories have to do with the credit lines you have currently. The first, Length of Credit History accounts for 15% and accounts for how long your credit accounts have been established and the age of all your accounts. Credit Mix is 10% and it consists of all of the credit cards, retail accounts, loans or any other debt you have. New Credit accounts for 10% of your score as well and this simply tracks how much new credit you have accumulated recently. Opening a lot of new accounts in a short period of time can indicate a greater risk.
When you go to look up your credit score, it is important to know what it consists of. Having a high credit score is important because it can open doors for you financially. Make sure you are informed and up to date on your credit score and credit history.