At a Glance

While the terms “FICO score” and “credit score” are often used interchangeably, they are not the same thing. A FICO score is just one type of credit score. You actually have many credit scores across different credit bureaus and credit products. This article will cover:

What is FICO Score?

FICO stands for Fair Isaac Corporation, which was the first company to ever create a credit score. The FICO score launched in 1989 and is the most widely used credit scoring metric.

There are dozens of FICO score models that fall under two main categories: base scores and industry-specific scores. Industry-specific scores are tailored to certain credit products, like mortgages or auto loans.

FICO scores also vary according to their updates, with the newest version being FICO Score 9 (released in 2016).

What is the FICO score range?

The FICO score range is typically 300 to 850. The higher the score, the better the credit and the lower the risk the borrower is to a lender.

Additionally, FICO offers industry-specific scores for credit cards and auto loans. These scores range from 250 to 900.

How is a FICO score calculated?

To calculate your creditworthiness, FICO uses five different factors:
 FICO Scores are calculated using these five metrics from your credit report


What affects your FICO score?

While FICO hasn’t shared its exact scoring model, there are factors that are more important than others when it comes to calculating a score.

  • Payment history makes up 35% of your score, so making payments on time each month can help improve your score. Alternatively, late or missed payments can hurt your score, especially if they are sent to collections.
  • Your credit utilization rate is the amount of debt you have relative to your credit limits, or how much of your available credit that you’re using. The lower, the better. Experts recommend keeping your utilization rate below 30%.
  • The age of credit refers to how long you’ve had credit as well as the average age of your credit accounts. The longer the age, the better. Therefore you should consider leaving some credit accounts open, such as credit cards, instead of closing them.
  • Recent credit applications trigger hard inquiries, which can decrease your score by up to five points per inquiry. These only affect your score for a short period of time, but they stay on your credit report for two years.
  • Credit mix is the type of credit you have. Having a mix of installment loans and revolving credit can help improve your score.

Why are FICO and other credit scores important?

When you apply for a loan, such as a mortgage or auto loan, the lender examines your credit score to assess risk and determine how likely you’ll be able to repay your loan. Credit scores allow lenders to quickly make decisions based on data that is both impartial and consistent, and reduces their chance of losing money to unreliable borrowers.

Borrowers with good credit scores are rewarded with access to loans and favorable interest rates. Borrowers with bad credit scores are often unable to get a loan or receive loans with high interest rates.

Difference between FICO score and credit score

There are several key differences between your FICO score and credit score. When comparing FICO vs credit score, reference this chart:

Category FICO Score Credit Score
Scoring Model Scale between 300-850 Scale may vary depending on the company issuing the credit score
Industry Adoption Used by 90% of lenders Often referred to as “educational” scores, not formally adopted by the majority of lenders
Excellent (720-850) Consistent and easy to understand scoring Can differ from FICO score by up to 100 points
How long to create a score At least six months of data required Depending on the company, could receive a score after only one month

Why is my FICO score lower than my credit score?

Because each of the three credit reporting bureaus doesn’t always have the same information, you could see a difference at each bureau depending on when you access your score. That means your FICO score could show lower than a VantageScore or other credit scoring option that is pulling slightly different information.

Why do I have different scores from different credit bureaus?

FICO and other credit bureaus all use different mathematical algorithms and criteria to determine their scores. In addition, not all lenders send reports to the same credit bureaus. If you pay a credit card bill late, and that credit card company only sends its report to one bureau, your score would be lowered on just that bureau’s credit report.

How to improve your credit score

Here are some different steps you can take to improve your credit score:

  • Avoid late payments: Your payment history is the biggest factor considered with almost every credit score.
  • Don’t close out old accounts: Don’t close out old accounts once you’ve paid your balance off. While this might seem counter-intuitive, closing accounts will raise your credit utilization rate and lower your overall score.
  • Check your credit report frequently: Your credit scores are all based on your credit report. Make sure to check your report for errors frequently.
  • Ask for a higher credit limit: A higher credit limit will improve your score by lowering your credit utilization rate.


FICO and VantageScore both operate on a credit range between 300-850. How high borrowers fall on this range reflects their ability to take on and repay credit effectively. Generally, lenders are more likely to issue a loan or line of credit to borrowers with a higher credit score.

Credit history is the most important contributing factor in calculating your FICO score (35%) and VantageScore (40%). The way you’ve managed credit in the past is important to lenders as they assess your ability to take on credit in the future.

New changes implemented in 2020 mean that those with high debt utilization (compared to available credit), personal loans, and late payments could see their score dip. But scores could improve for those who keep a timely payment history and use only the credit they need.

Your credit score can drop after paying off debt for several reasons. For example, if a line of credit is closed after being repaid, it can lower your length of credit history, thereby dropping your score. Another possibility is that you eliminated a type of debt, like closing your last revolving or installment loan. That could cause your credit mix to take a hit.

A hard credit inquiry happens when you submit an application for a new loan or line of credit. Hard credit inquiries are reported to credit reporting bureaus. Multiple hard credit inquiries in a short period could hurt your score. That’s because more credit applications signal a greater risk to lenders.

A late payment will stay on your credit report for up to 7 years. These late payments generally fall off your credit report after seven years from the original date of the late payment. To remove a late payment, you can try and write a goodwill letter to the lender to see if they would agree to strike the late payment from your record.

Borrowers with excellent credit scores may qualify for low-interest personal loans or 0% APR balance transfer credit cards for debt consolidation. Those with lower credit scores may turn toward debt consolidation options like a debt management plan (DMP) assisted by a non-profit credit counseling agency. Those with very low scores and unmanageable debt may consider debt settlement or bankruptcy as debt consolidation options.

FICO scores can be the same as credit scores in some instances. But it’s worth noting a FICO score is only one type of credit score. FICO is the most popular credit score reporter, often used instead of or alongside VantageScore, another credit scoring option.

90% of lenders use the FICO credit score when determining whether to approve your credit application, as well as your interest rate and terms or credit limit. While Experian is the largest credit bureau, Equifax and TransUnion are just as accurate.