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People Having A 850 Credit Score: All You Need To Know About 850 FICO Score

Personal Finance

A credit score of 850 is considered to be excellent by most standards. It means you have a great credit history and are a low-risk borrower. Having an 850 credit score can make getting approved for loans and credit cards easier and can help you get better interest rates.

This article will discuss what FICO is, how is the FICO score calculated, and what are the benefits of a FICO score. And you will know which housing finance company is the best for taking any loan. So let’s jump right into it.

What Is FICO?

Most people have heard of FICO, but few know what it is. FICO is a credit scoring system used by lenders to determine the creditworthiness of borrowers. Your FICO score is a numerical evaluation of your creditworthiness. It is a number that lenders use to evaluate your credit risk. Your score increases as your risk decreases.

Several factors can affect your FICO score, including your credit history, credit utilization, and payment history. You can easily check your FICO score for free.

What Do You Mean By FICO?

FICO stands for the Fair Isaac Corporation. FICO scores come in three different varieties.

  1. Base

Base FICO scores are the most commonly used. One of the three major credit bureaus estimates your credit score (Experian, TransUnion, and Equifax). 

  1. Industry-specific

Industry-specific FICO scores are used by some lenders to make decisions about applicants in specific industries, such as auto loans or credit cards. 

  1. Customized

Customized FICO scores are designed specifically for a particular lender and consider factors beyond your credit history, such as income or employment history.

How Is The FICO Score Calculated?

The FICO score is calculated using five main factors: payment history, credit utilization, length of credit history, credit mix, and new credit.

1. Payment history

The most essential factor in determining a FICO credit score is payment history. Payment history includes on-time payments, late payments, collections, and bankruptcies. It accounts for 35% of the score.

2. Credit utilization

The second leading factor, which accounts for 30% of the credit score, is credit utilization. Credit utilization indicates the amount of credit available you are using. Maintaining low credit utilization is essential because it shows that you’re not relying too heavily on credit.

3. Length of credit history

This factor accounts for 15% of the FICO score. It is ideal to have a longer credit history. The length of credit history is crucial because it shows how responsible you are with credit.

4. Credit mix

This factor accounts for 10% of the FICO score. Credit mix is the variety of different types of credit that you have. It’s good to have various credits, including credit cards, mortgages, and auto loans.

5. New credit

This shows the number of new credit accounts you’ve opened in the past six months. It’s essential to keep your new credit accounts to a minimum because it shows that you’re not being responsible for credit.

Why Is Your FICO Score Important?

Your FICO score is essential for several reasons. If you’re looking to get a loan, it’s essential to have a good score. And even if you’re not currently looking for a loan, it’s still a good idea to keep your score high so you’re prepared for the future. The followings are some key points to remember:

  • Firstly, It is one of the most vital factors lenders consider when considering a loan. A high score indicates that you’re a low-risk borrower, which could result in a loan with a cheaper interest rate. A low score could lead to a higher interest rate or loan rejection.
  • Second, your FICO score is a good indicator of your financial situation. A high score means you’re managing your credit well and are on your way to a bright financial future. A low score could mean you’re struggling to keep up with your payments and could be in danger of financial problems.
  • Finally, your FICO score is important because it’s used by many businesses to make critical decisions about you. For example, insurers may use your score to determine your premiums, or landlords may use it to decide whether to approve your rental application.

What Factors Impact The FICO Score?

Several factors can impact your FICO score, including:

  • The amount of debt you have
  • The types of debt you have
  • Your payment history
  • The length of your credit history

What Is a Good FICO Score?

Most people know that a good credit score is vital for getting loans and credit cards approved. But what is a good FICO score? The answer may surprise you – no “good” FICO score exists. FICO values range from 300 to 850 for the majority of people.

Generally, a score of 700 or above is considered good, while a score of 800 or more is considered excellent. However, it’s crucial to remember that each lender has their definition of a good score, so it’s always best to check with them directly to see what score they are looking for.

To get a good idea of where you stand, check your credit score report on any online banking platform. 

What are the Benefits of a FICO Score?

It is essential to know what are the benefits of having a FICO score. So, let’s point out what the benefits are: 

  • You’ll have access to more credit products. 
  • You’ll likely be offered better loan terms, including lower interest rates and credit limits. 
  • You can save money on insurance premiums. 
  • You’ll generally have an easier time renting an apartment or getting a job.


There’s no magic number for a good credit score, but generally speaking, the higher your score is, the better off you’ll be. You can easily be eligible for better interest rates, terms, and conditions on loans if you have an excellent credit score.

If you’re looking for a personal loan, then look no further, as Piramal Finance is a good option to finance money. The platform provides the best loan option as per your specific situation. They offer competitive rates on all loans, including those for people with bad credit, and help you through the entire process of getting a loan, from beginning to end.