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What is a FICO® Credit Score?

Last Updated: June 18, 2024

4 min read

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Key Points About: FICO® Credit Scores

FICO® Scores help lenders determine if a borrower is likely to repay their debt.
FICO® Scores typically look at five key categories in your credit history when determining your score.
90% of top lenders use FICO® Credit Scores¹, but there are other credit scores calculated differently.

Whether you’re new to credit or have been borrowing money for years, you’ve probably seen the term FICO^® Credit Score, but you may not know what it means. Knowledge of the basics of your score and how it affects your credit will help you manage your credit. Here’s what you need to know about FICO^® Scores.¹

What are FICO^® Scores?

According to the Fair Isaac Corporation (FICO), your credit score is a three-digit number based on the information on your credit report. Your FICO^® Score summarizes your credit history into a single number that moneylenders can use to figure out if you’re a good borrower (your credit risk). Most scores fall within a 300–850 credit score range based on the information in your credit file. Lenders consider higher FICO^® Scores lower risk, and lower FICO^® Scores higher risk. There is no single minimum FICO^® Score used by all lenders to qualify you for a loan, but in general a good credit score, can put you in a better position to get credit—and on better terms, according to information from the Federal Deposit Insurance Corporation (FDIC).

What impacts your FICO^® Credit Score?

FICO calculates your credit score based on these five key categories from your credit report and is typically based on the percentages below:

35% of your score is based on payment history.
30% is based on amounts you owe.
15% comes from the length of your credit history.
10% represents new credit.
10% is based on your credit mix.

The importance of these score factors may vary for different FICO^® Credit Score versions.

FICO^® Score versions

The most recent FICO^® Score is FICO^® Score 10, but many lenders continue to use previous versions, according to information from FICO.

FICO^® Score 8 assesses credit utilization more heavily and may be more forgiving of a one-off late payment compared to previous versions. FICO^® Score 8 includes FICO^® Auto Score and FICO^® Bankcard Score versions that help credit issuers make lending decisions for auto loans and credit cards.

FICO^® Score 9 reduces the negative impact of medical debt and paid off third-party collections on your credit file. This version also looks at reported rental payments when calculating your FICO^® Score. FICO^® Score 9 also has two industry-specific versions (Auto and Bankcard) that help lenders make more informed credit granting decisions for auto loans and credit card applications.

FICO^® Score 10 is the newest version of the FICO^® Score. The FICO^® Score 10T version looks at your payment and debt history for the previous 24-plus months to help calculate your score.

What is a FICO^® Score used for?

Credit issuers use FICO^® Credit Scores to see if they should give you credit, and what interest rate to offer you.

Why FICO^® Scores are important?

Your FICO^® Scores are important because lenders use these scores to predict how likely you are to pay back your debt. These scores give an unbiased look at your credit based on your actual borrowing and repayment history.

Your score is just one factor credit issuers may use when making a lending decision. It may impact several aspects of your credit, like your credit card interest rates, mortgages, and car loans. But it’s important to note that how each lender uses your FICO^® Score may be different.

It’s possible to achieve a perfect FICO^® Score of 850–in fact almost 3 million people do. However, you don’t need a perfect score to get credit at the best terms or with the lowest interest rates.

What’s considered a good credit score may differ from one credit issuer to another. Our credit score chart will give you an idea of where your FICO^® Score may fall.

FICO^® Score vs. Credit Score

90% of top lenders use FICO^® Credit Scores¹ in their lending evaluation process, but it's just one credit scoring model. There are different credit scores called educational scores. According to the Consumer Financial Protection Bureau, these credit scores do not use the same calculations as the FICO^® Score, so educational scores may differ from FICO^® Scores.

Why are FICO^® Scores sometimes different?

It’s important to understand that a credit score is based on your credit report at that credit bureau at the time the score is requested. Your credit file may not be the same at each bureau. So, you may see different FICO^® Scores at each of the three major credit bureaus (TransUnion, Equifax, and Experian).

Understanding how your FICO^® Credit Score works may help you make sense of changes in your credit score, alert you to possible errors on your credit record, and encourage you to think about how your borrowing behavior may impact your credit score and future borrowing situation.

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