FICO Credit Scores 101: Everything You Need to Know (2024)

FICO is the most recognizable name in credit scores. The Fair Isaac Corporation (now called FICO), which developed the FICO credit scoring model, says its scores are used by 90% of top U.S. lenders in 90% of lending decisions. There are currently several types of FICO scores available. The most widely used model is FICO 8, though the company has also created FICO 9 and FICO 10 Suite, which consists of FICO 10 and FICO 10T. There are also older versions of the score that are still used in specific lending scenarios, such as for mortgages and car loans.

Key Takeaways

  • FICO scores are the most widely used credit scores in the U.S. for consumer lending decisions.
  • There are multiple FICO credit scoring models, each of which uses slightly different criteria.
  • FICO scores are based on the information collected on individual consumers by the three major credit bureaus, including their payment history, credit utilization, and the age of their accounts.

How FICO Scores Work

FICO scores were introduced in 1989. The company uses information found in individual consumers' credit reports to calculate credit scores for them. These scores are then used by lenders to gauge each consumer's creditworthiness and determine whether to approve their applications for loans, credit cards, and other borrowing.

FICO scores range from 300 to 850, with 850 considered a perfect score. The higher your score, the better your odds of being approved for loans and lines of credit at the most favorable interest rates.

FICO scores are based on these five factors:

  • Payment history (35%)
  • Amounts owed (30%)
  • Length of credit history (15%)
  • New credit (10%)
  • Credit mix (10%)

Individuals can have more than one FICO score. The multiple FICO score versions in use today include:

  • FICO 2
  • FICO 3
  • FICO 4
  • FICO 5
  • FICO 8
  • FICO 9
  • FICO 10 and 10T

Each scoring model may be used in different lending situations. FICO scores 2, 4, and 5, for example, are used by both mortgage and auto lenders to determine borrowers' creditworthiness.Currently, the most common FICO score is FICO 8. This version also can be used in auto lending, as well as for personal loan and credit card decisions.

Each of the three major credit bureaus—Equifax, Experian, and TransUnion—generates consumer credit reports, which then are used to calculate FICO credit scores. You might have different scores for each bureau, based on the information that's been reported to them by your creditors.

What Is a Good Credit Score?

FICO classifies its scores as exceptional, very good, good, fair, and poor. The table shows which number ranges are associated with which rating.

FICO Score Ratings
Exceptional800 to 850
Very Good740 to 799
Good670 to 739
Fair580 to 669
Very Poor300 to 579

What Is FICO 8?

FICO 8 is still the most widely used credit score today. If you apply for a credit card or personal loan, odds are that the lender will check your FICO 8 score.

FICO 8 is unique in its treatment of factors such as credit utilization, late payments, and small-balance collection accounts. Here are some key things to note about FICO 8:

  • This scoring model is more sensitive to higher credit utilization (meaning the percentage of your available credit that you're using at any given time).
  • Isolated late payments on your credit report may not count against you as much as having multiple late payments.
  • Small-balance collection accounts, in which the original balance was less than $100, are ignored for scoring purposes.

It's also worth pointing out that there are different versions of FICO 8. With FICO Bankcard Score 8, which is used when you apply for a credit card, the focus is on how you've handled credit cards in the past. FICO Auto Score 8, on the other hand, doesn't emphasize credit card activity and history as heavily.

What Is FICO 9?

FICO 9 was introduced in 2016 and is available to both lenders and consumers. While not as widely used as FICO 8, this scoring model has some features that could help certain consumers improve their credit scores.

Here are the most noteworthy aspects of FICO 9:

  • Third-party collection accounts that have been paid in full no longer have a negative impact for credit scoring.
  • Unpaid medical collection accounts have less of a negative impact compared with other types of unpaid collection accounts.
  • Rental history can now be factored into FICO 9 credit scores, which may help people with limited credit history.

FICO 9 credit scores are available to consumers for free through lenders that participate in the FICO Score Open Access program. Your credit card company, for example, may offer free FICO 9 credit scores as one of its customer benefits.


Rent payments aren't factored into FICO 9 scores automatically. Your landlord has to report your payment history to one or all three of the major credit bureaus for your rent payments to be included.

What Are FICO 10 and FICO 10T?

FICO 10 and FICO 10T are new credit scoring models announced in 2020. FICO says the FICO Credit Score 10 Suite is designed to be its most predictive scoring model yet, giving lenders a more precise picture of someone's credit risk.FICO 10 and FICO 10T still follow the same basic FICO algorithm that focuses on payment history, credit utilization, credit age, credit mix, and credit inquiries. What makes FICO 10T different is the use of trended data.

Trended data looks at a person's credit patterns for the previous 24 months or longer. It takes into account things such as whether you carry a balance on your credit cards from month to month or always pay in full, and whether you've consolidated debts at any point during that time period.

The company expects FICO 10 and FICO 10T to eventually overtake FICO 8 as the most popular scoring models.

FICO Credit Scores vs. Other Credit Scores

While FICO scores dominate the credit scoring business, they're not the only product out there. The three major credit bureaus launched a competitor, VantageScore, in 2006. Its scores originally ranged from 501 to 900, but VantageScore 3 adopted the same 300-to-850 range as the FICO score. Like the FICO score, it is calculated using information from your credit reports, but it weights the various factors differently.

As with FICO scores, there are several different VantageScores, the most recent being VantageScore 4.0. Some credit card issuers, such as American Express, and other companies that offer free credit scores to their customers provide VantageScores rather than FICO scores.

How Can You Learn Your Credit Score?

You can purchase your credit score or obtain it for free from many banks and credit card companies. There are also websites where you can obtain free scores. Bear in mind that you probably have multiple credit scores, and the ones that you can get for free may not be identical to all the others.

How Can You Obtain Your Credit Reports?

You are entitled to see your credit reports from all three of the major credit bureaus at least once a year at the official website,

Do Credit Reports Show Your Credit Score?

No. While your credit scores are based on the information in your credit reports, they are not included in them.

The Bottom Line

FICO scores are the most widely used credit scores today, and there are multiple versions of them. Regardless of which FICO scoring model is involved, the same rules apply for maintaining a good score. These include paying bills on time, keeping your credit utilization ratio low, and applying for new credit sparingly.

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FICO Credit Scores 101: Everything You Need to Know (2024)


What is a 101 credit score? ›

Your credit score is the foundation of your financial identity, it's the number used by lenders as an indicator of how likely you are to repay your debts. It's a rating that reflects your financial habits and credit history, which financial institutions use to assess your risk as a credit applicant.

What is your FICO credit score Why do you need to know about this? ›

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).

What is a beginner FICO score? ›

Most people's initial credit scores are between 500 and 700 points, depending on the steps taken when establishing credit. However, you won't have a credit score to report if you've never opened a credit account. Read on to learn more about your starting credit score and how to build your credit over time.

How rare is an 800 credit score? ›

How rare is an 800 credit score? An 800 credit score is not as rare as most people think, considering that roughly 23% of adults have a credit score in the 800-850 range, according to data from FICO. A score in this range allows consumers to access the best credit card offers and loans with the most favorable terms.

How rare is 900 credit score? ›

It's exceedingly rare for anyone to have a credit score over 900, as most credit scoring models have a maximum limit of 850, and even achieving that score is uncommon.

Which FICO score is most important? ›

The FICO credit-scoring model has been updated over the years, resulting in multiple versions of the score. FICO Score 8 is the most commonly used. But the version may vary by lender and credit product, like applying for a credit card versus financing a car.

What is a decent FICO score? ›

Although ranges vary depending on the credit scoring model, generally credit scores from 580 to 669 are considered fair; 670 to 739 are considered good; 740 to 799 are considered very good; and 800 and up are considered excellent.

Which FICO score is important? ›

The FICO® Score is used by 90% of top lenders, but there are at least 16 versions of that model in use. Checking the widely used FICO® Score 8 can give you a good indication of how lenders will view your credit profile.

What credit score is needed for AAA credit card? ›

If you want to apply for the AAA Member Rewards Visa Signature® Card, we suggest having a FICO® Score of 670 or higher. This credit card is intended for consumers with good credit. Other factors are also assessed when determining approval, such as income and current debt.

What is a AAA credit score? ›

The S&P and Fitch AAA ratings are the highest assigned to any debt issuer. An AAA rating is the equivalent of the Aaa rating issued by Moody's. AAA ratings are issued to investment-grade debt that has a high level of creditworthiness with the strongest capacity to repay investors.

What is a good FICO score by age? ›

Following NerdWallet's general guidelines, a good credit score is within the 690 to 719 range on the standard 300-850 scale, regardless of age.

Is FICO or credit score more important? ›

"For years, there has been a lot of confusion among consumers over which credit scores matter. While there are many types of credit scores, FICO Scores matter the most because the majority of lenders use these scores to decide whether to approve loan applicants and at what interest rates."

What credit score is needed to buy a house? ›

The minimum credit score needed for most mortgages is typically around 620. However, government-backed mortgages like Federal Housing Administration (FHA) loans typically have lower credit requirements than conventional fixed-rate loans and adjustable-rate mortgages (ARMs).

Is 100 a bad credit score? ›

What Is a Bad Credit Score? On the FICO® Score 8 scale of 300 to 850, one of the credit scores lenders most frequently use, a bad credit score is one below 670. More specifically, a score between 580 and 669 is considered fair, and one between 300 and 579 is poor.

What does a credit score of 100 mean? ›

80 – 100 (Good): A score of 100 means your payments come 30 days soon than your terms specify. 80 indicates on time payments. 50 – 79 (Fair): A 70 indicates that you are paying 15 days late.

Does 900 credit score exist? ›

While older models of credit scores used to go as high as 900, you can no longer achieve a 900 credit score. The highest score you can receive today is 850. Anything above 800 is considered an excellent credit score.

What is a 800 credit score? ›

Your 800 FICO® Score falls in the range of scores, from 800 to 850, that is categorized as Exceptional. Your FICO® Score is well above the average credit score, and you are likely to receive easy approvals when applying for new credit. 21% of all consumers have FICO® Scores in the Exceptional range.

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