Understanding FICO Scores

Reason	TRW	TRANSUNION	EQUIFAX
Amount owed on accounts is too high	1	1	1
Delinquency on Accounts	2	2	2
Too few bank revolving accounts	3	N/A	3
Too many bank or national revolving accounts	4	N/A	4
Too many accounts with balances	5	5	5
Consumer finance accounts	6	6	6
Account payment history too new to rate	7	7	7
Too many recent inquiries last 12 months	8	8	8
Too many accounts opened in last 12 months	9	9	9
Proportion of balances to credit limit too high	10	10	10
Amount owed on revolving accounts is too high	11	11	11
Length of revolving credit history is too short	12	12	12
Time since delinquent is too recent or unknown	13	13	13
Length of credit history is too short	14	14	14
Lack of recent bank revolving information	15	15	15
Lack of recent revolving account information	16	16	16
No recent non-mortgage balance information	17	17	17
Number of accounts with delinquency	18	18	18
Too few accounts currently paid as agreed	19	27	19
Time since derogatory public record or collection	20	20	20
Amount past due on accounts	21	21	21
Serious delinquent or derogatory. public record or collection	22	22	22
Too many bank or national revolving accts w/ balances	N/A	N/A	23
No recent revolving balances	24	24	24
Proportion of loan balance to loan amt too high	33	3	33
Lack of recent installment loan information	32	4	32
Date of last inquiry too recent	N/A	19	N/A
Time since last account opening too short	30	30	30
Number of revolving accounts	26	N/A	26
Number of bank revolving or revolving accounts	N/A	26	N/A
Number of established accounts	28	28	28
No recent bankcard balances	N/A	29	N/A
Too few accounts with recent payment information	31	N/A	31

Four years ago, credit scoring had little to do with mortgage lending . When reviewing the credit worthiness of a borrower, an underwriter would make a subjective decision based on past payment history.

Then things changed.

Lenders studied the relationship between credit scores and mortgage delinquencies. There was a definite relationship. Almost half of those borrowers with FICO scores below 550 became ninety days delinquent at least once during their mortgage. On the other hand, only two out of every 10,000 borrowers with FICO scores above eight hundred became delinquent.

So lenders began to take a closer look at FICO scores and this is what they found out. The chart below shows the likelihood of a ninety day delinquency for specific FICO scores.

FICO Score	odds of a delinquent account

595	2.25	to	1
600	4.5	to	1
615	9	to	1
630	18	to	1
645	36	to	1
660	72	to	1
680	144	to	1
700	288	to	1
780	576	to	1