FICO stands for Fair Isaac Corporation, the data analytics company that created the most widely used credit scoring model in the United States. Engineer Bill Fair and mathematician Earl Isaac founded the company in 1956, and their scoring system eventually became the standard way lenders evaluate a borrower’s creditworthiness. Today the company goes simply by FICO, but the acronym traces directly back to those two founders’ last names.
What a FICO Score Actually Measures
Your FICO score is a three-digit number, ranging from 300 to 850, that summarizes how likely you are to repay borrowed money. Lenders use it to decide whether to approve you for credit cards, auto loans, mortgages, and other forms of borrowing, and what interest rate to charge you. A higher score signals lower risk to lenders, which translates into better rates and more favorable loan terms for you.
The score is calculated from the information in your credit reports at the three major credit bureaus: Equifax, Experian, and TransUnion. Because each bureau may have slightly different data on file, your FICO score can vary depending on which report is used to generate it.
The Five Factors Behind Your Score
FICO’s model weighs five categories of information from your credit report, each contributing a specific percentage to your overall score:
- Payment history (35%): Whether you’ve paid bills on time. Late payments, collections, and bankruptcies all drag this down. This is the single largest factor.
- Amounts owed (30%): How much of your available credit you’re currently using. If you have a credit card with a $10,000 limit and carry a $7,000 balance, that 70% utilization rate hurts your score. Keeping utilization below 30% is a common guideline.
- Length of credit history (15%): How long your accounts have been open. A longer track record gives lenders more data to work with, which generally helps your score.
- New credit (10%): How many accounts you’ve recently opened and how many hard inquiries appear on your report. Opening several new accounts in a short window can lower your score temporarily.
- Types of credit in use (10%): The mix of account types you carry, such as credit cards, installment loans, and a mortgage. Having experience with different types of credit can help, though this is a minor factor.
What the Score Ranges Mean
FICO scores fall into five general tiers that lenders use as benchmarks:
- Exceptional (800 and above): You’ll qualify for the best interest rates and terms available.
- Very good (740 to 799): Still well above average. Most lenders will offer you competitive rates.
- Good (670 to 739): Considered an acceptable risk by most lenders. You’ll get approved for most products, though not always at the lowest rates.
- Fair (580 to 669): Below average. You may still qualify for credit, but expect higher interest rates and less favorable terms.
- Poor (579 and below): Approval is difficult. You may need a secured credit card or a co-signer, and any credit you do get will carry steep costs.
The difference between tiers matters in real dollars. On a 30-year mortgage, the gap between a “good” and “exceptional” score can mean tens of thousands of dollars in additional interest over the life of the loan.
Different Versions of the FICO Score
There isn’t just one FICO score. The company has released multiple versions over the years, and different lenders may use different ones. FICO 8 remains the most commonly used version across the lending industry. It’s the score most credit card issuers and auto lenders pull when evaluating applications.
A newer model, FICO 10T, was validated by the Federal Housing Finance Agency in 2022 for use in mortgage lending. The “T” stands for trended data, meaning the model looks at the direction of your credit behavior over time, not just a snapshot. If you’ve been steadily paying down balances, FICO 10T rewards that trajectory. It also incorporates additional data sources, including rent payment history, which can help people with thinner credit files.
Industry-specific versions also exist. FICO Auto Score and FICO Bankcard Score are tailored models that weight certain factors differently depending on the type of credit being evaluated. When a car dealer pulls your score, it may not be the same number you see on a free credit monitoring app.
Where to Check Your FICO Score
Many banks and credit card issuers now provide your FICO score for free through their apps or online portals. You can also purchase it directly from myFICO.com, which shows scores from all three bureaus. Keep in mind that the free scores offered by some personal finance websites often use VantageScore, a competing model created jointly by the three credit bureaus. VantageScore uses the same 300 to 850 range but weighs factors differently, so the number you see may not match what a lender pulls.
Checking your own score counts as a “soft inquiry” and has no effect on the number. You can check it as often as you like without any risk.