Contributed By: Geoff Stam, Director Default Management and Financial Literacy, Office of the Chancellor

So, what is the credit score?  Your credit score is a three-digit number generated by a mathematical algorithm using information in your credit report (that we discussed earlier). The score is designed to predict risk, specifically, the likelihood that you will repay your credit obligations on time or become seriously delinquent on them in the 24 months after scoring.

There are a large number of credit-scoring models in existence, but one dominates the market: the FICO score. FICO stands for Fair Isaac Corporation as of 2003. According to, the consumer website for the FICO score developer, “90% of all financial institutions in the U.S. use FICO scores in their decision-making process.”

FICO scores range from 300 to 850, where a higher number indicates lower risk for delinquency in most scoring models.

Consumers generally have three FICO scores, one for each credit report provided by the three major credit bureaus: Equifax, Experian and TransUnion. Each reporting agency uses its own version or model of FICO scoring which is why you may see a different score from each. Also, lenders and other credit providing companies may report to each of the agencies differently which can also attribute to a variance in the scores.

Data from your credit report is broken into five major categories that make up a FICO score. Some factors are weighed more heavily, such as payment history and amount of debt owed.

The data elements that contribute to the score are as follows:

Payment History (35%)
Your account payment information, including any delinquencies and public records.

Amounts Owed (30%)
How much you owe on your accounts. The amount of available credit you’re using on revolving accounts is heavily weighted.

Length of Credit History (15%)
How long ago you opened accounts and time since account activity.

Types of Credit Used (10%)
The mix of accounts you have, such as revolving and installment.

New Credit (10%)
Your pursuit of new credit, including credit inquiries and number of recently opened accounts.

Personal or demographic information such as age, race, address, marital status, income and employment don’t affect the credit score.

It is important understand, that the credit score alone may not always be the determining factor as to whether you will be approved for a loan or a line of credit.  Depending on what type of financial instrument you are applying for, there may be other factors that are incorporated into how you are scored or approved for the type of loan or credit you are seeking.

Please feel free to contact me if you have any questions or need additional assistance.  I can be reached at (904) 296-3440 extension 139, or [email protected].  The i3 Group can be reached at 1-866-296-7955 or You can register for a free account at