What is a FICO Score? How is it calculated?

Yes, I was also wondering the same thing...

There are so many technical terms regarding credit cards I sometimes feel very lost, especially when trying to decide which card should I get considering my previous credit history etc.

And often if you google them, you will find different explanations.

I always had the impression that ‘FICO score’ is just another name for ‘credit score’ which is the numerical value of your creditworthiness and is used by banks and other institutions offering credit to determine whether you should receive or not a loan based on your previous history with paying back (or not paying) loans etc.

Is this the case or not? Reading this thread I started getting a bit confused…

 Hi Fred, the situation is not so simple. You are right that the credit score expresses your creditworthiness but the FICO score is not the only one around. FICO stands for Fair Isaacs Corporation, which is a company getting reports about your credit history etc. from credit reporting agencies and calculates your score by taking into account things like your payment history, current indebtedness level, the types of credit you used, the length of your credit history and others. But there are other similar companies like Vantage which although also calculate your credit score, might end of with slightly different results than FICO…

Wow, this sounds quite complicated! But how do these credit reporting agencies get access to your data? Shouldn’t this be private?

 Well, they get it from the institutions where you apply for credit.

They need this calculations in order to decide whether there are chances you’ll pay back or not.

Thank you very much for all this information, guys! Really helpful! Although, truth to be told, I feel now a bit insecure knowing that my data is collected by these agencies and there's nothing to do about it

 Yea, this sounds damn scary, almost like in a George Orwell novel…IS there no more privacy left in this world??