FICO Score: Mortgage Help For Those With Low Credit History
Fair Isaac Corporation
makes the FICO score. Lenders look at a borrower's FICO score and credit record to see if they're a good credit risk.
The firm has altered its scoring system many times since 1989. As a result, there are several different versions of FICO.
FICO ratings evaluate payment history, current debt, types of credit used, credit history duration, and new credit accounts to determine creditworthiness.
FICO is a big analytics software company that sells goods and services to both individuals and businesses. In the US, more than 90% of credit decisions are based on FICO scores.
Low FICO scores are a deal barrier for many lenders, even if borrowers can justify bad credit. Mortgage lenders have rigorous FICO minimums.
When this threshold is one point below it, a denial is made. So, there are many good reasons for borrowers to give FICO more weight than any other bureau.
FICO weights credit score components differently. Accounts owing (30%), credit history (15%), new credit (10%), and credit mix (10%) make up the score. 5%
Calculating FICO Score
Both FICO scores and credit scores made by other companies with different methods can be used to predict the same kinds of risks.
FICO and other credit ratings may not be the same because they employ different techniques. Different credit score models employ different information in their formulae.