Fair Isaac Corporation (FICO) stands out as the gold standard for credit scores, invented the algorithm in 1989. FICO credit scores, ranging from 300 to 850, are calculated using information from credit reports and heavily influence lending decisions for mortgages, credit cards, and loans.

FICO credit scores are three-digit numbers reflecting credit report details, similar to letter grades. The scores are determined by payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%), and credit mix (10%). Maintaining good scores requires responsible debt management across these categories.

FICO offers various versions of credit scores, with FICO Score 8 being the most common. Newer versions like FICO Score 9 and 10 aim for precision, while older versions are used by mortgage lenders. Industry-specific scores like FICO Auto Scores and FICO Bankcard Scores cater to specific lending needs.

Improving credit scores takes time, but strategies like becoming an authorized user on a credit card and reducing credit utilization can lead to significant gains. Consistent debt management practices, like paying bills on time and monitoring credit reports for errors, are vital for long-term credit health.

Most creditors consider FICO scores between 670 and 739 as “good.” While other companies calculate credit scores, only those done by Fair Isaac Corporation (FICO) are true FICO scores. Maintaining good credit involves understanding the factors that influence scores and implementing strategies to improve them over time.

Read more at Yahoo Finance: What is a FICO score, and why should you know yours?