#credit score rating
Credit score rating definitions: A-credit, B-credit, C-credit, D-credit
Credit score rating is widely used by financial institutions to assess the trustworthiness of borrowers; by employers to assess the responsibility of their employees; by insurers and other businesses to decide on the type of product to offer to the customer.
Generally, FICO (Fair Isaac Corporation) score is the most widely used credit rating model in the United States and ranges from 300 to 850. The exact formula for calculating FICO credit score is not disclosed but FICO have pointed the following factors for determining credit rating and their approximate weighted contribution:
- 35% – previous payment history
- 30% – amount of debt owed
- 15% – length of credit history
- 10% – new credit obtained recently
- 10% – types of credit used
Understanding A-Credit, B-Credit, C-Credit, and D-Credit Notations
Credit scores may be a little confusing to understand. Even within a FICO score there are additional ratings that may vary from lender to lender.