What is a FICO® Score?

A FICO Score is a three-digit number based on the information in your credit reports. It helps lenders determine how likely you are to repay a loan. This, in turn, affects how much you can borrow, how many months you have to repay, and how much it will cost (the interest rate).

When you apply for credit, lenders need a fast and consistent way to decide whether or not 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. It measures how long you've had credit, how much credit you have, how much of your available credit is being used and if you've paid on time.

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 years ago, the Fair Isaac Corporation (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.

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 first home, or cover medical expenses. Even some insurance and utility companies will check FICO Scores when setting up the terms of the 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.

And overall, fair, quick, consistent and predictive scores help keep the cost of credit lower for the entire population as a whole. The more accessible credit is, the more lenders can loan and the more efficient they can be in their processes to drive costs down and pass savings on to the borrowers.

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 and are used by over 90% of top lenders when making lending decisions.

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 scores 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.

What is a good FICO Score?

Every lender determines for themselves what is a good FICO Score and how they will use a FICO Score and other information within the loan approval process. Bear in mind that a good credit score is one you are working to improve.

In general, many lenders find scores above 670 as indicating good creditworthiness. Typically, the higher your score, the lower the risk and the more likely creditors are to lend to you.

There are general score ranges recognized by creditors to help them make lending decisions. These ranges can also serve as goals for you to achieve.

You can improve your score over time. The information in your credit reports is continually changing, which means your FICO® Score is also updating frequently. Check out our tips for repairing credit and improving scores.

FICO Scores by Percent of Scorable Population

FICO Score Ranges Rating Description
<580 Poor Your score is well below the average score of U.S. consumers and demonstrates to lenders that you are a risky borrower.
580-669 Fair Your score is below the average score of U.S. consumers, though many lenders will approve loans with this score.
670-739 Good Your score is near or slightly above the average of U.S. consumers and most lenders consider this a good score.
740-799 Very Good Your score is above the average of U.S. consumers and demonstrates to lenders that you are a very dependable borrower.
800+ Exceptional Your score is well above the average score of U.S. consumers and clearly demonstrates to lenders that you are an exceptional borrower.

Why are there different FICO Scores?

  1. 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 more current.
  2. 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 better decisions and serve their customers better.

Ready to learn more about FICO Scores?

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.

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