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No. of Recommendations: 5
FICO estimates your ability to repay debt. It doesn't reflect what is best for your finances.

How does it estimate your ability to repay debt. There are not any incomes included in the calculations. It represents your credit history - how reliably and timely you pay any debts off. Also the amount of debt to credit you are utilizing.

It would be more accurate to say that FICO estimates how likely you are to repay your debt, rather than your ability to do so. Bear in mind that the score was created for lenders, who care far more about whether you *will* repay the debt than about whether you *can* repay the debt.

It's a fine point, to be sure; people with higher FICO scores may overlook the possibility that someone could have the ability to repay debt but not actually repay it.

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