What is a FICO® Score?
At a Glance: A FICO® Score is a three-digit number used by 90% of top lenders to assess creditworthiness. It is based on factors like payment history, credit utilization, and length of credit history, helping lenders make consistent and fair decisions. Understanding your FICO Score can empower you to make informed financial choices which could help you access better credit opportunities.
A FICO® Score is a three-digit number, ranging from 300 to 850, developed by the Fair Isaac Corporation (FICO). It is calculated using your credit report data. It helps lenders determine how likely you are to repay a loan, which in turn affects how much you can borrow, how many months you have to repay, and how much it will cost (the interest rate). Read on to learn more about how FICO® Scores work, why they are important, and the difference between FICO Scores and other credit scores.
How FICO® Scores work
When you apply for credit, lenders need a fast and consistent way to decide whether to loan you money. In most cases, they'll look at your FICO® Scores.
You can think of a FICO® Score as a summary of your credit report. A FICO Score measures several aspects of your credit report, including:
- Whether you've paid on time (payment history).
- How much of your available credit is being used (amounts owed).
- How long you've had credit (length of credit history).
- What types of credit you have (credit mix).
- Recent credit inquiries (new credit).
Not only does a FICO® Score help lenders make smarter, quicker decisions about who they loan money to, it also helps people like you get fair and fast access to credit when you need it. Because FICO Scores are calculated based on your credit information, you have the ability to influence your score by paying bills on time, not carrying too much debt, and making smart credit choices.
Thirty five years ago, FICO debuted FICO® Scores to provide an industry standard for scoring creditworthiness that was fair to both lenders and consumers. Before the first FICO Score, there were many different scores, all with different ways of being calculated (some even including gender and political affiliation).
Learn more about the history of FICO® Scores.
What are the main factors that determine a FICO® Score?
FICO® Scores are determined by five key factors:
- Payment history (35%): Whether you've paid past credit accounts on time.
- Amount of debt (30%): The amount of credit you're using compared to your total credit limit.
- Length of credit history (15%): How long your credit accounts have been established.
- New credit (10%): How often you've applied for or opened new credit accounts.
- Credit mix (10%): The variety of credit accounts you have, such as credit cards, mortgages, and auto loans.
Why are FICO® Scores important?
FICO® Scores help millions of people like you gain access to the credit they need to do things like get an education, buy a home, or cover medical expenses. Even some insurance and utility companies will check FICO Scores when setting up the terms of their service.
The fact is, a good FICO® Score can save you thousands of dollars in interest and fees as lenders are more likely to extend lower rates if you present less of a risk for them. A better FICO Score can help you:
- Qualify for loans or credit cards.
- Receive lower interest rates.
- Access higher borrowing limits.
- Save money on interest and fees.
See all the ways your FICO® Scores can help you.
Watch for a deeper explanation on FICO® Scores:
What is the difference between a FICO® Score and other credit scores?
Only FICO® Scores are created by the Fair Isaac Corporation. Why? Because FICO Scores are the industry standard for making accurate and fair decisions about creditworthiness. They help millions of people get the credit they need for a home, a new car, or a special purchase.
You may have seen ads for other credit scores, or likely even purchased them in the past. These other credit scores calculate your credit score differently than FICO® Scores. So, while the other credit scores may seem similar to the FICO Score, they aren't. Only FICO Scores are used by 90% of the top lenders.
Learn more about FICO® Scores vs. other credit scores.
What is a good FICO® Score?
A good FICO® Score is generally considered to be 670 or above. Scores of 740 and above are considered very good, and scores of 800 or higher are exceptional. Typically, the higher your score, the lower the risk and the more likely creditors are to lend to you.
Creditors use general score ranges to guide their lending decisions. These ranges can also serve as meaningful benchmarks for your own financial goals.
The information in your credit reports is continually changing, which means your FICO® Score is also updating frequently.
Base FICO® Scores range from 300 to 850 and are grouped into five categories to help interpret a borrower's credit risk.
| FICO® Score Range | Rating | Description |
| Below 580 | Poor | Your score is well below the average score of U.S. consumers and demonstrates to lenders that you are a risky borrower. |
| 580 to 669 | Fair | Your score is below the average score of U.S. consumers, though many lenders will approve loans with this score. |
| 670 to 739 | Good | Your score is near or slightly above the average of U.S. consumers and most lenders consider this a good score. |
| 740 to 799 | Very Good | Your score is above the average of U.S. consumers and demonstrates to lenders that you are a very dependable borrower. |
| 800 and above | Exceptional | Your score is well above the average score of U.S. consumers and clearly demonstrates to lenders that you are an exceptional borrower. |
Learn how to improve your FICO® Score.
Why are there different FICO® Scores?
- To better meet the demands of today's credit usage. We use credit a lot differently than we did 30 years ago. FICO® Scores have periodically been updated to stay current.
- To meet the needs of different types of lenders. Auto lenders and credit card issuers look at some things differently to determine your creditworthiness. FICO created industry-specific scores to help these lenders make more accurate decisions and to better serve their customers.
Ready to learn more about FICO® Scores?
Learn more about the FICO Score versions here. Then, head over to the myFICO® Forums for in-depth, community-led discussions about FICO® Scores. Ask questions and get answers from thousands of experts and others that have been through similar situations.
FAQs about FICO® Scores
How do you choose the right credit score monitoring service for your needs?
When selecting a credit monitoring service, look for a provider that delivers actual FICO® Scores — not alternative credit scores — since these are the scores used by 90% of top lenders. Also consider features like score change alerts and detailed score breakdowns. myFICO is a trusted source for accessing your FICO Scores directly.
Why is my FICO® Score important to lenders?
Lenders use FICO® Scores to assess how likely you are to repay a loan as agreed. A higher score indicates lower risk, which can lead to better loan terms, such as lower interest rates and higher borrowing limits. FICO Scores provide lenders with a consistent, fair, and predictive way to evaluate creditworthiness.
How does a FICO® Score affect loan approval?
Your FICO® Score plays a significant role in loan approval by helping lenders determine whether you meet their minimum credit requirements, what interest rate you qualify for, and what borrowing limits they are willing to extend. Higher scores generally mean lower rates and more favorable terms. The lower your score, the more risk a lender perceives, which can affect both approval odds and the cost of borrowing.