What is FICO and how is it used?
Understanding FICO
Usage of FICO
The Fair Isaac Corporation, commonly known as FICO, is a data analytics company that creates predictive algorithms based on consumer credit data. It provides a credit scoring system, which is widely used in the United States to determine a borrower's creditworthiness. This score is based on several factors, including payment history, credit utilization, length of credit history, types of credit used, and recent credit inquiries. The FICO score ranges from 300 to 850, with higher scores indicating better creditworthiness. The score is used by lenders and credit card companies to determine the interest rate and credit limit they will offer to a borrower. Individuals with higher scores are considered less risky and may qualify for better terms on loans and credit cards. FICO scores are also used by insurance companies and landlords to assess the risk of a potential policyholder or tenant. It is important to maintain a good credit score, as it can impact many aspects of an individual's financial life.What does the acronym FICO stand for and what is its primary use?