What does a FICO score measure regarding an applicant?

A FICO score measures an applicant's creditworthiness, which essentially reflects their willingness and ability to meet debt obligations. This score is calculated based on credit history, accounting for various factors like payment history, amounts owed, length of credit history, new credit, and types of credit in use. A higher FICO score typically indicates that the applicant has a strong history of repaying debts on time, which lenders use as a key indicator of how likely it is that the individual will continue to meet their future financial obligations.

On the other hand, while ability to obtain new credit may be influenced by a FICO score, it is not the primary measure that the score evaluates; rather, it is an outcome of the score’s indication of creditworthiness. Homeownership duration and valuation of assets owned are not direct components of a FICO score.