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UnderstandingYour FICO
 
ScoreUnderstandingYourFICO
®
 
Score
 
Your FICO
®
Score—A Vital Part of Your Credit Health. . . . . . . . . . . . 1How FICO
®
Scores Help You. . . . . . . . . . . . . . . . 2Your Credit Report—The Basis ofYour FICO
®
Score. . . . . . . . . . . . . . 3How FICO
®
Scores Work. . . . . . . . . . . . . . . . . . . 5What a FICO
®
Score Considers. . . . . . . . . . . . . . 71.Payment History. . . . . . . . . . . . . . . . . . . . 82.Amounts Owed. . . . . . . . . . . . . . . . . . . . . 93.Length of Credit History. . . . . . . . . . . . 104.New Credit. . . . . . . . . . . . . . . . . . . . . . . 115.Types of Credit in Use. . . . . . . . . . . . . . 12How the FICO
®
Score Counts Inquiries. . . . . . . 13Interpreting Your FICO
®
Score. . . . . . . . . . . . . . 14Checking Your FICO
®
Score. . . . . . . . . . . . . . . . 15Checking Your Credit Report. . . . . . . . . . . . . . 16
Contents
Please note that Fair Isaac and myFICO are not credit repair organizations or similarly regulated organizationsgoverned by the federal Credit Repair Organizations Act or similar state laws. Fair Isaac and myFICO do notprovide so-called “credit repair” services or advice or give advice or assistance regarding “cleaning up” or“improving” your credit record, credit history, or credit rating.
Fair Isaac, FICO, the 300–850 score range, the FICO score seal and myFICO are trademarks or registered trademarks of Fair Isaac Corporation,in the United States and/or in other countries. Other product and company names herein may be trademarks of their respective owners.© 2000–2007 Fair Isaac Corporation. All rights reserved. This information may be freely copied and distributed without modification fornon-commercial purposes.1557EB 10/07 10,000
 
WHO ISFAIR ISAAC?
Founded in 1956, Fair Isaacuses advanced math andanalytics to help businessesmake smarter decisions.Besides inventing the FICO
®
score, Fair Isaac has alsocreated other leading tools,including products that helpbusinesses detect credit fraud,manage credit accounts andautomate complex businessdecisions. It is important tonote that while Fair Isaac workswith the credit reportingagencies to provide your FICO
®
scores, it does not determinethe accuracy of the informationin your credit report.
Your FICO
®
Score—A Vital Part of YourCredit Health
When you’re
a
pplyin
g
for
c
redi
t
—whe
t
heri
t
’
s
 
a
 
c
redi
t
 
ca
rd,
a
 
ca
r lo
a
n,
a
per
s
on
a
llo
a
n or
a
mor
tgag
e—lender
s
w
a
n
t
 
t
oknow your
c
redi
t
ri
s
k level.
In other words,“If I give this person a loan or credit card, how likelyis it that I will get paid back on time?” There are threemajor credit reporting agencies (Equifax, Experianand TransUnion) in the United States that maintainrecords of your use of credit and other informationabout you. These records are called credit reports,and lenders will want to check your credit reportwhen you apply for credit. In most cases, lenders willalso want to know your credit score.
What is a credit score?
A credit score is a number that summarizes yourcredit risk, based on a snapshot of your credit reportat a particular point in time. Acredit score helps lenders evaluateyour credit report and estimateyour credit risk.The most widely used creditscores are FICO
®
scores, thecredit scores created by Fair IsaacCorporation. Lenders can buyFICO
®
scores from all three majorcredit reporting agencies. Lenders use FICO
®
scores to help them make billions of credit decisionsevery year. Fair Isaac develops FICO
®
scores basedsolely on information in consumer credit reportsmaintained at the credit reporting agencies.Your credit score influences the credit that’s availableto you and the terms (interest rate, etc.) that lendersoffer you. It’s a vital part of your credit health.This booklet can help you understand how creditscoring works. Understanding your FICO
®
score canhelp you manage your credit health. By knowinghow your credit risk is evaluated, you can takeactions that may lower your credit risk—and thusraise your credit score—over time. A better FICO
®
score means better financial options for you.
More inform
at
ion on FICO
®
sc
ore
s
 
a
nd
c
redi
t
 
sc
orin
g
 
ca
n be found online
at
 
www.myfi 
c 
o.
c 
om/  
c 
redi 
t 
edu 
cat 
ion
.
UNDERSTANDING YOUR FICO
®
SCOREFAIR ISAAC CORPORATION 1
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