Your FICO score is one of the most important pieces of information used when you apply for any loan. A good score will get you the lowest available interest rates which can translate into huge savings on your car or mortgage payments. Your FICO score can feel like a bit of a mystery... where does that magic number come from? FICO is a short form or acronym for Fair Isaac Corp., which is a public company that created the number known as the FICO score. The range of scores reaches from 300 to 850, the higher the better. Each of the three legally recognized credit bureaus provide FICO scores of individuals being sought reviewed, which can vary between companies based on the transactions recorded in your financial history.

Credit-reporting agencies use information about an individual's payment history, work record etc. to compile a credit report for banks and other lenders.

Simplistically put, FICO scores are computed into parts, where 35% is for remittance history, 30% is for outstanding debt as against available credit, 15% is for length of loan and history, 10% is for type of credit used. By improving on the larger chunks of the loan parts, the FICO score would definitely upgrade.

Of course, a higher score means you are a better "risk" for the bank or other lender. You will be most likely to get a credit card, for example, or get better terms on a loan.

Credit reports can vary because each agency might work with slightly different information on the same individual. That alone makes it important for each person to make sure that the information agencies use is correct.

One of the most important factors is the personal record of paying bills on time, a key factor in the FICO score. Also, your record of remittances would be one of the many factors that affect your FICO rate.

With the knowledge of your FICO credit score, you are better able to handle financial issues for the future.