Your FICO score is a three-digit number, ranging from 300 to 850, that represents how likely you are to repay borrowed money on time. Lenders use it to decide whether to approve you for credit cards, mortgages, auto loans, and other financing, and what interest rate to charge you. The higher your score, the less risky you appear, which translates directly into lower borrowing costs.
How the Score Is Calculated
FICO scores are built from the data in your credit reports at the three major credit bureaus (Equifax, Experian, and TransUnion). That data gets sorted into five categories, each carrying a specific weight:
- Payment history (35%): Whether you’ve paid bills on time. Late payments, collections, and bankruptcies hurt the most here. This is the single biggest 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 high usage rate works against you. Keeping balances well below your limits helps.
- Length of credit history (15%): How long your accounts have been open. A longer track record gives lenders more data to judge your habits, so older accounts are valuable.
- New credit (10%): How many new accounts or credit inquiries you’ve had recently. Opening several accounts in a short window can signal financial stress.
- Credit mix (10%): The variety of credit types you manage, such as credit cards, an auto loan, and a mortgage. Having a mix shows you can handle different kinds of debt, though this is a minor factor.
Because payment history and amounts owed together account for 65% of the score, paying on time and keeping balances low are the two most powerful things you can do to build or maintain a strong number.
What the Score Ranges Mean
FICO scores fall on a 300 to 850 scale. While exact category labels can vary slightly by lender, the general tiers work like this: scores below about 580 are considered poor, 580 to 669 is fair, 670 to 739 is good, 740 to 799 is very good, and 800 to 850 is exceptional. Most lenders use these tiers as rough cutoffs to determine eligibility and pricing.
You don’t need a perfect 850 to get the best terms. On a mortgage, for example, borrowers with scores of 760 and above typically qualify for the lowest available rates. The difference between a good score and a poor one, though, is significant in dollar terms.
How Your Score Affects Borrowing Costs
The practical impact of your FICO score shows up most clearly in the interest rate you’re offered. On a 30-year conventional mortgage for $350,000, the gap between a strong score and a weak one can mean tens of thousands of dollars over the life of the loan.
As of March 2026, a borrower with a score of 780 could expect a rate around 6.25% on a 30-year fixed mortgage, while someone with a 620 score would face roughly 7.14%. That difference of nearly a full percentage point works out to about $230 more per month, or roughly $83,000 in extra interest over 30 years. Even a modest improvement from 660 to 700 could save you around $60 a month on the same loan.
The effect extends beyond mortgages. Auto lenders, credit card issuers, and personal loan companies all adjust their rates and approval decisions based on your score. Some landlords and insurance companies check it too, so a higher score can lower your cost of living in ways that go beyond loan interest.
Minimum Scores Lenders Typically Require
Different loan products have different score floors. For conventional home loans, most lenders require at least a 620. FHA loans allow scores as low as 500, though you’ll need a larger down payment at the bottom of that range. VA loans generally require around 620, and USDA loans typically need at least 580. Jumbo loans, used for higher-priced properties, often require 700 or above.
Credit cards and auto loans have less rigid published minimums, but the pattern holds: higher scores unlock better cards with lower rates and higher limits, while lower scores limit you to secured cards or subprime auto financing with steep interest charges.
Why You Might Have More Than One Score
You don’t have just one FICO score. FICO has released multiple versions over the years, and lenders don’t all use the same one. FICO Score 8 is the most widely used base version, but mortgage lenders have historically relied on older, industry-specific versions tailored to predict mortgage default risk. Auto lenders and credit card issuers may use their own industry-specific FICO scores, which are fine-tuned for those particular types of lending.
Base FICO scores range from 300 to 850, but industry-specific versions use a broader 250 to 900 scale. This means the auto-specific score your car dealer pulls could be a different number than the base score you see on your bank’s app. Both are legitimate FICO scores built from the same credit report data, just weighted slightly differently depending on the type of credit being evaluated.
Your scores can also differ across the three credit bureaus because not every lender reports to all three. If one bureau’s file is missing an account, the score calculated from that file will be different. This is normal and not a sign of an error.
How to Check Your Score
Many banks and credit card issuers now provide free FICO score access through their apps or online portals. You can also purchase scores directly from myFICO.com, which lets you see multiple versions at once. Keep in mind that the free scores you see through these channels are real FICO scores, but they may not be the exact version a particular lender will pull when you apply.
Your underlying credit reports, which feed the score calculation, are available for free once a year from each bureau at AnnualCreditReport.com. Reviewing your reports lets you spot errors in the data that could be dragging your score down, such as an account incorrectly marked as late or a balance reported at the wrong amount. Disputing and correcting those errors with the bureau can lead to a score increase without any change in your actual credit behavior.