FICO score is a credit score developed by Fair Isaac Corporation. It is used by many mortgage lenders that use a risk-based system to determine the possibility that the borrower may default on financial obligations like payment to the mortgage lender.

Fair Isaac Corporation’s uses different scoring methods to rate a borrower’s suitability for three types of credit —mortgages, automobile loans, and consumer credit. It is not unusual for these scores to differ for the same borrower. The FICO credit score range formerly ranged between 300 and 850. A new scoring system now ranges ffrom 501-990. Borrowers can buy consumer credit score from Fair Isaac, and they can choose which agency the data is obtained from.

The higher your FICO credit score, you will have lower monthly payments. So in order to have low monthly payments, you have to increase your credit score. Credit score is calculated by five data categories:

• Payment history (35%).
• Amounts owed (30%).
• Length of credit history (15%).
• New credit (10%)
• Type of credit used (10%)