FICO stands for the company that developed it: Fair Isaac Corporation.

Fair Issac Corporation was developed back in 1956 by an engineer name Bill Fair and a mathematician named Earl Isaac.  Similar to the company FedEx whose full name is Federal Express, Fair Issac Corporation was often called by its nickname FICO until the nickname became the more commonly used name.

The Company FICO takes information from the three credit reporting agencies and analyzes it to create a score that represents to lenders how likely someone is to pay back additional credit. FICO works closely with Experian, Transunion and Equifax, the companies who provides FICO with the data which make up the credit score. Note that FICO is not the only company which analyzes credit data to generate uniform scores but it is the most common; therefore, many people refer to ‘credit score’ and ‘FICO score’ as one in the same.

Although FICO published its system of credit bureau based credit scoring in the 1980’s, it did not gain momentum and credibility until 1995 when Fannie Mae and Freddie Mac recommended that lenders use FICO scores.

Both creditors and consumers are able to access FICO scores. FICO scores range from 300 to 850 with a higher number representing less risk to lenders and a lower number representing more risk to lenders. Creditors characterize a FICO score of 650-699 as moderate and 700 and above as a good-to-excellent score. Potential buyers with a higher FICO score will have an easier time getting credit and will have better terms and conditions on the money borrowed.

FICO’s Score Chart

The following are aspects that FICO takes into consideration when developing credit scores:

  • Payment history (35%)
  • Debt/Amounts owed (30%)
  • Age of credit history (15%)
  • New credit/inquiries (10%)
  • Mix of accounts/types of credit (10%)


What other aspects do FICO analyze?

The following are other things that FICO analyzes to determine your likelihood of paying back debts:

  • Does this person pay on time?
  • How much does this person owe?
  • How long has this person had a credit history?
  • To what extent has this person taken out new credit and what happened with it?


FICO does NOT analyze or take into consideration:

  • Gender
  • Race
  • Age
  • Marital status
  • Where this person lives in the world
  • The person’s assets
  • The person’s income


The bankruptcy attorney at Seelinger Law can help you experience financial freedom. Contact us online or by calling (814) 824-6670 to set up your free consultation so we can determine if bankruptcy is the right step for you.

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