What Is a FICO Score?

A FICO score is the branded version of credit score most widely used by the nation’s largest financial institutions to make credit and loan approval decisions.

What Is a FICO Score? 

There are 27 million FICO scores sold each day, and 90% of all lending decisions in the United States are based on one. If you’re looking into your credit report or applying for a loan, you’ll probably come across your FICO score.

Equifax, Experian, and TransUnion—the three major credit bureaus—calculate scores using FICO Formulas and detailed information they keep on your credit history. Credit Scores range from 300 to 850, with higher scores representing a smaller risk to lenders.


Credit scores between 700 and 750 are considered excellent, while scores below 650 are generally considered bad, while scores below 600 are very poor. It’s important to understand, however, that different lenders have different standards, and they’re all looking at different issues on your report. 

Having a credit score of 675 will allow you to get a mortgage, but you won’t be approved for a specific type of credit card. No matter how low your credit score may be, you can start building a better one today.

You can purchase your FICO scores from the three major credit bureaus by visiting myFICO.com


banks, credit unions, credit card issuers, and other financial services include a free FICO score with your monthly statement. You can also request a free copy of your credit report, which will include your FICO score, every 12 months from each of the three major credit bureaus.

How FICO Scores Work

Your FICO score is based on five key pieces of information:

  • Payment Timeliness: This accounts for 35% of your score. If you pay late, what is the duration of the delay? Have there been any collections calls? Have you had any bankruptcies or foreclosures? more negative marks you have and the more severe they are, the more your score will be impacted.
  • Debt : The amount of debt you have can have a negative effect on 30% of your score. Credit bureaus look at what’s called your credit utilization ratio. Your score usually goes up when you don’t use more than 30% of available credit. 
  • Longevity : Your score will be enhanced if you keep your combined balances below the $3000 mark, so if you have credit cards with combined limits of $10,000, you will want to keep them below that number. The length of your credit history counts for 15% of your score. How long have you had your accounts open for on average? If you’ve used credit responsibly for decades, you’ll probably have a higher score than someone with a shorter credit history.
  • Credit inquires: Credit inquiries account for 10% of your credit score. If you apply for credit frequently, lenders may view you as a risk, which will lower your score. People seeking more credit might be experiencing cash flow challenges, which is a big red flag for lenders.
  • Account mix: About 10% of your score is attributed to the mix of credit accounts you have. This includes all types of loans: mortgage, auto loan, student loan, credit card. The more accounts you have, the better your credit rating. Build a diversified portfolio over time.2

What’s Not Included in Your FICO

FICO scores cannot be determined by anything discriminatory, such as your sex, your marital status, your religion, or nationality.


FICO also states that it does not consider information such as where you live, your job, salary, or your credit accounts’ interest rates. 


Soft inquiries into your credit do not impact your FICO score, including your own requests to check your credit report, requests made by potential employers, or inquiries made by lenders for pre-approval offers.

Notable Happenings

A consortium of Fair, Isaac, and Company engineers was established in 1956; the organization’s name comes from the Fair, Isaac, and Company company. was to improve business decisions by using data intelligently. Fair and Isaac developed and sold their first credit scoring system in 1958.


Since 1991, FICO scores have been available to all three of the major credit bureaus. By the mid-1990s, Fannie Mae and Freddie Mac began using them for mortgage lending. In 2009, FICO officially changed its brand name and stock symbol to FICO.


Over the years, FICO has evolved in many different versions. The most recent one, FICO 9, has reduced the effect medical debt has on consumer credit scores. Not all lenders, however, are moving forward with the latest version at the same pace. 


It’s important to know the system that your lender uses, as many still rely on FICO 8, and some may use more than one

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