FICO Scores (Fair, Isaac and Company Scores) originate from the start of any account. Whether it is a credit card, a car loan or a furniture loan, whenever payment begins credit is built. Great credit is built when a borrower has continually paid all bills on time for long periods of time. Furthermore, responsible borrowers will pay more than the minimum payment due, this is important because usually when a borrower only pays the minimum payment on a credit card, the payment may only be going towards the interest of the loan and not the balance. Also, borrowers who do not have large amounts of revolving debt will have higher credit scores. On the other hand, those who have lower FICO scores have not created enough payment history to build great credit, or they have a number of negative marks that have tarnished their credit.

Some of these negative marks may be as follows:

Delinquencies

Too many accounts opened within the last 12 months

Short credit history

Balances on revolving credit are near the maximum limits

Public records such as tax liens, judgments, bankruptcies, foreclosures, collections, late payments, wage garnishments, lawsuits or too much debt

No credit card balances

Too many recent credit inquiries

Too few revolving accounts

Too many revolving accounts

Any one of these negative marks can greatly damage a borrower's credit. Lenders will look at FICO scores and categorize them to determine loan programs. The strongest selling tool a borrower has is their FICO score. The better the credit score the better the loan program and interest rate.