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The Underpinnings Of A Good FICO Score

Fair Isaac Corporation, or FICO, is one of the most well-known types of credit scores in the country. FICO scores are used by most lenders to decide on loan applications. The score ranges between 300 and 850. Your credit score will significantly impact your application. Lenders will look at the score and determine your ability to repay a loan.

The Underpinnings Of A Good FICO Score
A lower score reflects an inability to pay your dues on time. A FICO score higher than 670 is considered a good credit score, and a score higher than 800 is considered excellent.

FICO Score range
It is important to understand that the FICO score ranges before applying for a loan application. Your FICO score plays a crucial role in determining whether your application is approved. You can retrieve your credit report and learn about your credit score. A FICO score of 300–579 is considered very poor. Credit applicants with a score in this range may be required to pay a fee or a deposit, and with this rating, the application may not be approved at all. Very few individuals have score in this range. Further, a score ranging from 580 to 669 is considered fair, and the scores of about 20% individuals lie in this range. These individuals are considered subprime borrowers. A FICO score ranging from 670 to 739 is considered good, and almost 21% of applicants lie in this  score range. Notably, in terms of percentage, the incidence of serious delinquency among applicants in this score range is very small. A FICO score of 740–799 is considered very good, and applicants lying in this score range are likely to receive better-than-average rates from lenders. Finally, a score of 800–850 is considered exceptional, and applicants falling in this score range are offered the best rates by lenders.


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FICO score factors
The following factors play a crucial role in determining your score, and FICO calculates its scores based on them.

  • Most influential factor: Payment history pertaining to loans and credit cards
  • Highly influential: Total amount owed
  • Moderately influential: Period of credit history
  • Least influential: Credit mix or type of accounts you have

Minimum credit score
There is no specific minimum credit score requirement to apply for loans or credit cards. However, if your score is low, you are less likely to qualify for loans or to receive favorable rates. If you want to qualify for a loan with a low credit score, you will have to wait until your credit improves so you can get the best possible rate. To get an Federal Housing Administration mortgage loan, you are required to have a score of at least 580 and make a down payment of 3.5% of the loan amount. Applicants with scores lower than 580 may qualify for such a loan, but they will be required to make a down payment of 10% in addition to meeting other requirements.

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