FICO Score
Quick Definition
The most widely used credit scoring model, created by Fair Isaac Corporation, ranging from 300 to 850.
Key Takeaways
- About 90% of top U.S. lenders use FICO scores for credit decisions
- Multiple FICO versions exist — your score varies depending on which version is used
- FICO scores and VantageScores may differ by 20-40 points for the same person
- Score ranges: 300-579 Poor, 580-669 Fair, 670-739 Good, 740-799 Very Good, 800-850 Exceptional
What Is FICO Score?
The FICO score is the dominant credit scoring model used by approximately 90% of top U.S. lenders when making credit decisions. Created by the Fair Isaac Corporation, FICO scores range from 300 to 850 and are calculated using five weighted factors: payment history (35%), amounts owed (30%), length of credit history (15%), credit mix (10%), and new credit (10%). There are multiple FICO score versions (FICO 8, FICO 9, FICO 10) and industry-specific variants for auto loans and credit cards. FICO scores differ from VantageScore, another common model, in how they weight certain factors. Lenders use different FICO versions depending on the loan type, which is why consumers may see different scores across bureaus and platforms.
FICO Score Example
- 1A FICO score of 740+ is typically needed for the best mortgage rates, potentially saving $50,000+ over a 30-year loan.
- 2FICO 8 ignores small collection accounts under $100, while FICO 9 ignores all paid collections.
- 3Mortgage lenders use FICO Score 2, 4, and 5, while auto lenders use FICO Auto Score 8 — a consumer's scores may vary by 20-40 points across versions.
Related Terms
Credit Score
A numerical rating (typically 300-850) that represents a person's creditworthiness based on their credit history.
Credit Utilization
The percentage of available revolving credit currently being used, a major factor in credit score calculations.
Pre-Approval
A lender's conditional commitment to provide a specific loan amount based on verified financial information.
Mortgage
A loan secured by real property used to purchase a home, typically repaid over 15 to 30 years.
FAFSA (Free Application for Federal Student Aid)
The federal form used to determine eligibility for financial aid including grants, loans, and work-study programs.
401(k)
An employer-sponsored retirement savings plan with tax advantages, often including employer matching contributions.
Expand Your Financial Vocabulary
Explore 130+ financial terms with definitions, examples, and formulas
Browse Personal Finance Terms