How Does LendingTree Get Paid? LendingTree is compensated by companies whose listings appear on this site. This compensation may impact how and where listings appear (such as the order or which listings are featured). This site does not include all companies or products available.

What is a FICO Score?

Tara Mastroeni
Written by Tara Mastroeni
Dawn Daniels
Edited by Dawn Daniels
Updated on: July 3, 2025 Content was accurate at the time of publication.
We are committed to providing accurate content that helps you make informed money decisions. Our partners have not commissioned or endorsed this content. Read our editorial guidelines here.

If you’ve been looking into borrowing money recently, you’ve probably heard the phrase “FICO Score” thrown around a lot. However, when you’re new to the world of personal finance, it can be hard to understand what a FICO Score is and why it seems to matter so much.

We’ll cover what it is, how it’s calculated and how to find your current score for free. Plus, if needed, we’ll even offer some tips on how to improve your score over time.

Key takeaways
  • A FICO Score is a type of credit scoring model that ranges from 300 to 850, with scores of 670 and above generally being considered good scores. 
  • FICO looks at five factors when calculating its scores: payment history, amounts owed, length of credit history, new accounts and credit mix.
  • You have more than one FICO Score. FICO has multiple versions of its scoring model that each weigh those five factors differently.

What is a FICO Score?

Created by the Fair Issac Corporation (FICO), a FICO Score is a type of credit score that ranges from 300 to 850 and measures a borrower’s creditworthiness. This score is used by lenders when making lending decisions to assess how likely a borrower is to repay funds that they’ve borrowed. Generally, the higher the score, the more likely the person is to repay their debts on time. 

Why is your FICO Score important?

Your FICO Score is important because it determines how easily you’ll be able to access credit in the future and how much you’ll pay for the privilege. If you have a good or excellent FICO Score, you can often get approved for new forms of credit, like mortgages, auto loans, personal loans and credit cards without issue. You’ll also likely get a lower interest rate on your loan when you borrow.

In contrast, if you have a lower score, you may find it difficult to find lenders who are willing to lend to you. You’ll also likely be offered higher interest rates because lenders are trying to offset some of their risk. 

However, no matter where your FICO Score currently stands, the good news is that you can always take steps to improve your score. It won’t happen overnight, but it is possible to develop good credit habits and gradually improve your score over time. 

How do FICO Scores work?

We’ll get into more specifics about how FICO Scores are calculated later, but for now, it’s important to understand how FICO receives that information in the first place. Here’s a look at the process:

  • After you borrow money, most lenders will report information about your repayments to the three credit bureaus.
  • The three credit bureaus, Experian, Equifax, and TransUnion, each use that information to build a credit report for you.
  • Both scoring models, FICO and VantageScore, use the information in your credit reports, along with their own proprietary calculation models, to generate a credit score for you.    

FICO Score vs. VantageScore: What’s the difference?

VantageScore is a separate scoring model from the FICO Score. Launched in 2006 in a combined effort by the three credit bureaus, VantageScore also provides you with a score ranging from 300 to 850 and looks at similar factors, such as payment history, amounts owed and length of credit history, to determine your score.

However, each of these factors is weighted differently between the two scoring models and their score ranges differ as well. For example, a score of 670 is generally considered a good FICO Score, while a score of 700 is usually considered a good VantageScore. 

That said, good financial habits will generally build up both scores.

FICO Score ranges

FICO Scores can range from 300 to 850. Within that span, scores are broken down into a few different score ranges:

  • Poor (300-579): A score in this range is below average for U.S. consumers and indicates that the borrower may be a lending risk. 
  • Fair (580-669): Fair credit scores are still below average, but many lenders will still extend credit to borrowers in this range.
  • Good (670-739): Most lenders consider a score in this range to be a good credit score. This is the average score range for U.S. consumers. 
  • Very good (740-799): A score in this range is above average and demonstrates that the borrower is very dependable. 
  • Exceptional (800-850): Borrowers in this range are considered exceptionally low risk for lenders, as their scores are well above average. 

FICO Score versions

FICO has released many different versions of its scoring model throughout the years to try and make it easier for lenders to assess risk. FICO Scores generally fall into two broad categories, although there can be many different versions used within each category.

  • Base FICO Scores: A base FICO Score, like FICO Score 8, tells a lender how likely you are to repay any type of loan, regardless of the industry.
  • Industry-specific FICO Scores: Industry-specific FICO Scores, like the FICO Auto Score or FICO Bankcard Score, use information provided by the base FICO Scores, along with industry-specific insights to determine how likely you are to repay a specific type of loan. It’s often used for things like mortgages, auto loans and student loans. 

Which FICO Score should I be tracking?

Most of the time, you can contact prospective creditors to find out which FICO scoring model they use to evaluate their applicants. However, even if they won’t disclose that information, your base FICO Score — the type offered by most tracking tools — can give you a good idea of the range where your other score versions will typically land.   

Keep reading to learn how to check your FICO Score for free.

How are FICO Scores calculated?

Now that you know how FICO Scores work, it’s a good idea to learn how they are calculated. In particular, FICO looks at five distinct factors to determine your score with the company.

Payment history (35%)

Payment history shows a record of how well you’ve repaid previous debts on time. According to FICO’s research, it’s the best predictor of whether you will continue to pay what you owe, which is why it accounts for the largest percentage of your score. 

This segment of your score includes information about payments made on or before their due date, late payments and any bankruptcy or collections data that your lenders submit.

Amounts owed (30%)

In a broad sense, this metric refers to your total debts. However, owing money doesn’t necessarily mean your score will be lower. FICO looks at how much money you owe compared to the total amount of credit available to you, also known as your credit utilization ratio.

In this case, the higher this ratio is, the lower your score will be. The research shows that the more overextended you are, the less likely you are to be able to keep up with repaying your debts on time. 

Length of credit history (15%)

As a general rule, the longer your credit history is, the better your score. That said, it is possible to have a good FICO Score even if you haven’t had credit for that long. FICO takes into account the age of your oldest and newest accounts, as well as the average age of all your accounts when calculating this metric.

New credit accounts (10%)

Although new accounts stay on your credit report for two years, FICO looks at the number of hard credit inquiries you’ve had in the past 12 months. Its research shows that opening several new accounts in a short period of time is a risk factor for default, especially among people who don’t have a long credit history.

Credit mix (10%)

Your credit mix represents the different types of credit accounts you have in your name. FICO considers:

As a rule of thumb, if you have a mix of these types of accounts, your score will be higher. But, FICO says not to worry too much about it.  

How to check your FICO Score

The next step in this process is to learn how to check your FICO Score. Here are some ways to check your score for free:

  • Check with your bank or credit card issuer: Your bank or credit card issuer will likely offer a free tool to check your score. Just be sure to check which scoring model your financial institution uses. For example, Capital One’s CreditWise uses FICO Score, but Chase uses VantageScore for its Credit Journey tool. 
  • Enroll with FICO or a credit bureau: FICO offers a free credit score monitoring service, as well as paid options. The three credit bureaus also offer similar tools, although Experian is the only one to display your FICO Score. Equifax and TransUnion use VantageScore.  
  • Use a third-party credit monitoring service: If you want access to additional benefits, such as insights for improvement or lender offers, consider using a third-party platform, like LendingTree Spring or Credit Karma. Although both of these tools utilize VantageScore, they can help you do more than just see a number.

How to improve your FICO Score

As noted above, having a high score will come in handy when you need to borrow money. If your score needs some work, here are some steps you can take to improve your score over the long haul.

Check your credit report for errors

If there are errors in your credit report, they could be hurting your credit score through no fault of your own. Luckily, you can obtain free, weekly copies of your credit report from each of the three major credit bureaus through AnnualCreditReport.com.

Once you obtain a copy of your credit report from each agency, read each one over carefully. If you find information that is inaccurate, use our guide on how to dispute errors to try to get it resolved. 

Pay your bills on time

Since payment history accounts for 35% of your FICO Score, it’s smart to pay your bills on time. You may want to consider enrolling in autopay to make the process easier. If you’re not a fan of autopay, you may be able to arrange your payment due dates so they align with when you get paid and set reminders so that you don’t forget to submit your payments.

Keep your credit utilization ratio low

Your credit utilization ratio, or the measure of how much debt you owe versus the total amount of credit available to you, also accounts for a large chunk of your FICO Score. As a rule of thumb, aim to keep this ratio as far below 30% as possible to keep your score high.

If your ratio needs work, do your best to pay down your debts, as this will have the most significant impact. Still, it’s also worth noting that requesting a credit line increase can also help in a pinch.

Limit new account applications

FICO considers the number of accounts you’ve opened within the last 12 months, so think carefully before opening any new forms of credit. Make sure you truly need them and, if possible, wait to open a new account until any record of an old one has fallen off your credit report.

Learn more about your credit score

Want to know your credit score? Click here.

Learn more about credit repair companies!

How is my credit score calculated?

Get debt consolidation loan offers from up to 5 lenders in minutes