How to Figure Out Your Credit Score (FICO, BNI)
Your credit score is used by lenders and credit card companies to make decisions about whether or not to extend you a line of credit or issue you a mortgage or auto loan or business loan. Creditors also use your credit score to figure out how much interest to charge on a loan. Knowing how important credit score is, you're probably wondering who decides what your credit score is and exactly what it is. Find out how to understand the process of credit scoring whether or not you can figure out your credit score on your own.
Other People Are Reading
Instructions
-
-
1
Learn the range of credit scores. For people in the U.S., a credit score is a number from 300 to 850 that represents the risk to a lender that you'll default on a debt, loan, or payment or declare bankruptcy. You cannot figure out a credit score on your own, as the formulas are not made public. However, you should be able to find out what your credit score is. See Tips for information on what is considered a "good" credit score.
-
2
Decide what purpose you have in finding out your credit score. Whether or not your credit score is considered good or bad, risky or not, varies depending on what kind of loan you're seeking - a mortgage, auto loan, or revolving credit. And your riskiness to lenders--how credit worthy you are--depends on more factors than just credit score.
-
-
3
A credit score compares you with others who have similar credit history data and makes projections about your borrowing and payment behavior. The most well-known type of credit score is called the FICO score, which stands for Fair Isaac Corporation. You FICO score tells your creditors how likely you are to default on a mortgage, auto loan, or consumer credit loan. The BNI score tells your creditors the statistical likelihood that you'll declare bankruptcy.
-
4
Keep in mind that credit scores are calculated independently--using different statistical models--by the three consumer reporting companies, Equifax, TransUnion, and Experian. Your credit score may be different with each company. The information that goes into calculating your credit score comes from reports by lenders in your credit history.
-
5
Understand that FICO scores are also called BEACON scores by Equifax, Experian/Fair Isaac Risk Model by Experian, and Empirica by TransUnion.
-
6
Equifax, Experian, and TransUnion are the three consumer reporting companies who calculate credit score and report credit score to lenders and consumers, as well as insurance companies, landlords, and employers. If you want a copy of your credit score, know that you are entitled by the FCRA (Fair Credit Reporting Act) to receive your credit score from these companies for a small fee along with your free annual credit report.
-
1
Tips & Warnings
Although there is no universal formula for interpreting credit scores, the general agreement is that a credit score below 620 indicates you're a high risk to lenders. A credit score from 620 to 660 indicates you're borderline risky. A credit score between 660 and 720 indicates you're a good credit risk, while a score about 720 is considered an excellent credit score and more likely than lower scores to get you not only approved for loans, but a low interest rate.
