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Ann Arbor State Bank Ann Arbor State Bank
125 West William St.
Ann Arbor, MI 48104 (734) 761-1475

Credit Score

Your credit score is also commonly called a FICO®* score, as it’s based on a model developed by the Fair Isaac Corporation. Your credit score represents your overall credit history in a single number based on information in your credit report. The way you’ve handled your finances in the past will help predict how you may do so in the future. Ann Arbor State Bank will consider your score (and the scores of any co-borrowers) when you apply for a mortgage or other type of loan.

What a FICO® score represents

FICO® scores generally range from 300 to 850. A higher score increases a lender’s confidence in the likelihood you will make your loan payments on time. This number can make a big difference in determining whether or not you qualify for a loan, and the type of loan terms you can obtain. A higher credit score may also help you qualify for more favorable interest rates and terms.

How FICO® scores are calculated

Your FICO® Score is calculated from several different pieces of data in your credit report and is weighted in the following categories:

Payment history: 35%

The payment history on your loans and bills is an important part of your FICO® score. You must show that you’re paying your bills and repaying loans you already have or have had in the past. Late payments, defaults and court judgments all count to reduce your score. The more recent your problems the more significant they’ll be.

Outstanding debt: 30%

The more you owe now the less your borrowing capability may be. Included in the calculation are your credit card debts, overdrafts, and any other financing you’re repaying. The score also takes into account the balances and usage on your store and credit cards. As a general rule, try to maintain your cards within 25% of their limits.

Length of credit: 15%

The longer you have had your credit cards and loans the better your score. This is because lenders have a lengthier accurate record of your payment habits. Stick with the same cards as long as you can. Many people switch cards regularly for better rewards and interest-free terms, but come mortgage-application time this might cost them dearly resulting in high interest rates or even a refusal.

New credit accounts: 10%

New credit may have a negative impact and cause a reduced score until you have established a repayment history. Your score may also be affected by hard credit inquiries where you’ve filled out an application agreeing that your credit records can be checked. Personal searches do not count.

Type of current credit: the final 10% of your FICO score is based on the form of the credit you have. For example, it’s best to have several different types of credit than several different credit cards. Examples are car loans, revolving credit (store cards, store accounts), and personal loans.

 Find your FICO® score

Contact any of the three major credit reporting agencies—Equifax, Experian and TransUnion—to request your credit report and your score. Visit to get a free copy of your credit report which reflects your account and payment history. You are entitled to receive one free report each year from each of the three major credit reporting agencies. Be aware that while the credit report is free you may have to pay a fee to obtain it.

Ann Arbor State Bank is happy to provide your three credit scores as part of our loan pre-qualification process.

*FICO® is a registered trademark of the Fair Isaac Corporation.