Your FICO^® score is a big deal for your financial life. It can influence whether you get approved for loans, credit cards, and even rentals. But what is a FICO^® score, and why does it matter?

What is a FICO^® Score?

A FICO^® score is a type of credit score lenders use to figure out how risky it is to lend you money. It’s a number that generally ranges from 300 and 850, with higher scores showing better creditworthiness.

How is Your FICO^® Score Calculated?

Your FICO^® score is based on info from your credit reports from Experian, TransUnion, and Equifax. It considers five key factors:

• Payment History (35%): Are you paying your bills on time?
• Amounts Owed (30%): How much of your available credit are you using?
• Length of Credit History (15%): How long have you had credit accounts?
• Credit Mix (10%): Do you have different types of credit, like credit cards and loans?
• New Credit (10%): Have you opened new accounts recently?

Why is Your FICO^® Score Important?

Lenders use your FICO^® score to set the interest rates and terms of the credit they offer. A higher score can mean better loan terms and lower interest rates, saving you money. Plus, a good FICO^® score boosts your chances of getting approved for credit.

Tips to Improve Your FICO^® Score:

• Pay Your Bills on Time: This is the biggest factor for your score.
• Avoid Collections: Even if you pay off a collection account it will stay on your report for 7 years.
• Keep Balances Low on “Revolving Credit”: Aim to use less of your available credit.
• Don’t Close Unused Credit Cards: The longer your credit history, the better. Plus, more available credit helps with capacity.
• Rate Shop Within a Short Time Period: FICO® Scores differentiate between loan searches partly based on the duration of the inquiry period.
• Manage Credit Responsible: Having a varied mixture of credit with on-time payments is beneficial and indicates lower risk compared to someone with no credit history.
• Regularly Check Your Credit Reports: Look for and correct any errors.

Check Your FICO^® Score for Free

If you have a loan with PNWFCU, you can check your FICO^® score for free through online banking or our mobile app. Simply log in, go to the FICO^® score tab (under the ‘More’ section in the app), and follow the prompts. We update your FICO^® score quarterly and checking it won’t affect your score. (Note: this service is available only if you have a loan with PNWFCU.)

More questions about FICO^® scores? Click here or contact us.