Fair, Isaac and Company Scores, also known as FICO Scores, range from 300 to 850 points. These scores are statistically categorized by one credit repository composed of three different Credit Bureaus: Equifax, Trans Union, and Experian, all of which have set bench marks of credit range categorized as poor, fair, good, and excellent. These ranges of credit are based not by a borrower's income or assets, although they still are considered, but by the amount of credit gained from payment history.

The types of credit lenders assess to make lending decisions are:

Payment History - public record, severity of late payments, and frequency of delinquencies

Outstanding Debt - number of balances, average balance of all trade-lines, and relationship between total balances

Credit History - oldest trade lines, and number of trade lines

Pursuit of New Credit - number of recent inquiries, and the time between these recent inquiries

Types of Credit in Use - bank cards, department store cards, travel and entertainment cards

FICO scores also reflect foreclosures, bankruptcies and collections all of which significantly lower a borrower.s credit score. In short, lower credit scores require more review than higher credit scores. Many times mortgage lenders will not even consider a score below 600. The higher the credit score, the more likely a borrower will pay back a loan on time throughout the duration of the loan. Simply put, credit scoring is a statistical means of assessing how likely a borrower is to pay back a loan.