What is a Fico?                                                                                                 Back to Finance
By LifeAdviceSite.com

What is a FICO? Your FICO is your credit score. FICO stands for: Fair Isaac & Co. I know what you're thinking: "Who is Isaac, and what's fair about him?"   Well, it's actually two people. In 1956, an engineer named Bill Fair and a mathematician named Earl Isaac founded a company which they named... surprise! Fair Isaac and Company. The two developed the concept of a FICO score, which is measure of credit risk. Basically, information is gathered from the main credit reporting bureaus, which, in the US, includes Equifax, Transunion, and Experian. The information that is gathered includes number of open credit accounts and the length of time those accounts have been opened, total credit limit as well as the total balances carried in relation to those limits, and payment history. Payment history includes the number and frequency of any late payments and the level of delinquency, such as 30 days late, 60, 90, etc. All of this information is fed into some sort of FICO generating super-computer (as I imagine...) and a number is generated. This number, commonly referred to as a credit score, or FICO score, can fall anywhere from 300 to 850. This number is, in large part, the determining factor in whether or not you will be able to obtain credit such as a credit card, loan, or mortgage. In addition, this score affects the amount of credit you will be able to obtain, and the interest rate you will pay in return for borrowing that money.