The FICO score concept was introduced by the Fair Isaac Corporation in 1989 in order to rate a person's credit worthiness. FICO scores fall between 300 and 850. Any score below 600 indicates a possible bad credit risk, while a 700 and above 700 is considered good credit worthiness.

The Importance of Your FICO score: FICO scores are calculated using a model, is your credit worthiness report card. The higher the grade, the better your credit risk looks to lenders. To have a low FICO score could indicate failure to make the grade as a credit risk. A possible reason why many don't a FICO score is due to their recent arrival to the United States.

Improving Your FICO Credit Score: You can improve your FICO score by addressing your weakness areas or by correcting any possible mistakes or possible outdated entries.

Get a copy of your credit report. If you were recently denied credit you are entitled to a free copy, upon request. You may also request a report online or by phone, a right granted annually to consumers under federal law. Call Annual Credit Report at toll-free number (877) 322-8228.

Your report lists specific information, including credit cards you have opened and closed, balance activity, and any loans. Although the report through Annual Credit Report is free, it only provides lines of credit data. Obtaining the actual FICO score number will cost around $7.

Once you have your credit report in hand, you can get a handle on what others are seeing. Scan carefully for errors, especially checking that all account balances are accurate and that any negative items, such as late payments, are correct.

What makes up your FICO score?

The actual number is determined by five credit aspects, 35% is weighed towards paying your bills on time. Another 30% is based on outstanding debt, high balances typically give you a lower score. Owing more than 70% of your available credit can become a negative. An additional 20% of the score is applied towards the number of new accounts applied for recently, and the mix of credit types on the credit report. Length of credit history accounts for the last 15%.

By knowing what factors affect your score, you can get the numbers running in your favor, and before you know it, your credit will be in top-notch shape.