This is the scoring that is used for credit reporting. FICO is a public company that provides analytics and decision making services, including credit scoring intended to help financial services companies make complex, high-volume decisions.
FICO was founded in 1956 as Fair, Isaac and Company by Bill Fair and
Earl Isaac. It went public in 1987 and was originally called Fair,
Isaac and Company, it was renamed Fair Isaac Corporation in 2003,
then changed its name and ticker symbol to FICO. It also sells other
financial related products.
The big three credit reporting companies use this scoring to
determine your creditworthiness. Each has its own name, but all use
the FICO calculations methodology. Score is calculated on the
following. Payment history 35%, amounts owed 30%, length of history
15%, new credit 10%, and types of credit used 10%. It includes only
information on your credit report, and nothing else, like race, age,
employment, income, etc. It is a snapshot in time and changes as
your circumstances change, so you can influence the number for
better or worse. Scores range from 300 to 850 with 60% of people
falling between 650 and 799.
FICO score is used for home and auto loans, calculating interest
rates, and buying insurance, etc. Some states allow employers to use
the score to determine potential hiring.
Some tips - Paying down credit cards and revolving credit are better
to increase your score than paying off auto or home loans. Also,
making payments on time is important. Closing accounts does not make
them go away.
You can get your credit history for free once a year, but I have not
found a way to get an actual FICO score without paying something.
There are free trials, but they entail an automatic enrollment in a
program that takes some work to get out of before a payment is
subtracted from your credit card. If your credit is OK, do not worry
about your FICO.