Whether you’re new to credit or have been borrowing money for years, you’ve probably seen the term FICO® Credit Score, but you may not know what it means. Knowledge of the basics of your score and how it affects your credit will help you manage your credit. Here’s what you need to know about FICO® Scores.1
What is a FICO® Credit Score?
Last Updated: June 18, 2024
4 min read
Key Points About: FICO® Credit Scores
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FICO® Scores help lenders determine if a borrower is likely to repay their debt.
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FICO® Scores typically look at five key categories in your credit history when determining your score.
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90% of top lenders use FICO® Credit Scores1, but there are other credit scores calculated differently.
What are FICO® Scores?
According to the Fair Isaac Corporation (FICO), your credit score is a three-digit number based on the information on your credit report. Your FICO® Score summarizes your credit history into a single number that moneylenders can use to figure out if you’re a good borrower (your credit risk). Most scores fall within a 300–850 credit score range based on the information in your credit file. Lenders consider higher FICO® Scores lower risk, and lower FICO® Scores higher risk. There is no single minimum FICO® Score used by all lenders to qualify you for a loan, but in general a good credit score, can put you in a better position to get credit—and on better terms, according to information from the Federal Deposit Insurance Corporation (FDIC).
If you’re new to credit, the Discover it® Secured Card can help you build credit with responsible use.2
What impacts your FICO® Credit Score?
FICO calculates your credit score based on these five key categories from your credit report and is typically based on the percentages below:
- 35% of your score is based on payment history.
- 30% is based on amounts you owe.
- 15% comes from the length of your credit history.
- 10% represents new credit.
- 10% is based on your credit mix.
The importance of these score factors may vary for different FICO® Credit Score versions.
FICO® Score versions
The most recent FICO® Score is FICO® Score 10, but many lenders continue to use previous versions, according to information from FICO.
FICO® Score 8 assesses credit utilization more heavily and may be more forgiving of a one-off late payment compared to previous versions. FICO® Score 8 includes FICO® Auto Score and FICO® Bankcard Score versions that help credit issuers make lending decisions for auto loans and credit cards.
FICO® Score 9 reduces the negative impact of medical debt and paid off third-party collections on your credit file. This version also looks at reported rental payments when calculating your FICO® Score. FICO® Score 9 also has two industry-specific versions (Auto and Bankcard) that help lenders make more informed credit granting decisions for auto loans and credit card applications.
FICO® Score 10 is the newest version of the FICO® Score. The FICO® Score 10T version looks at your payment and debt history for the previous 24-plus months to help calculate your score.
What is a FICO® Score used for?
Credit issuers use FICO® Credit Scores to see if they should give you credit, and what interest rate to offer you.
Why FICO® Scores are important?
Your FICO® Scores are important because lenders use these scores to predict how likely you are to pay back your debt. These scores give an unbiased look at your credit based on your actual borrowing and repayment history.
Your score is just one factor credit issuers may use when making a lending decision. It may impact several aspects of your credit, like your credit card interest rates, mortgages, and car loans. But it’s important to note that how each lender uses your FICO® Score may be different.
It’s possible to achieve a perfect FICO® Score of 850–in fact almost 3 million people do. However, you don’t need a perfect score to get credit at the best terms or with the lowest interest rates.
What’s considered a good credit score may differ from one credit issuer to another. Our credit score chart will give you an idea of where your FICO® Score may fall.
FICO® Score vs. Credit Score
90% of top lenders use FICO® Credit Scores1 in their lending evaluation process, but it's just one credit scoring model. There are different credit scores called educational scores. According to the Consumer Financial Protection Bureau, these credit scores do not use the same calculations as the FICO® Score, so educational scores may differ from FICO® Scores.
Why are FICO® Scores sometimes different?
It’s important to understand that a credit score is based on your credit report at that credit bureau at the time the score is requested. Your credit file may not be the same at each bureau. So, you may see different FICO® Scores at each of the three major credit bureaus (TransUnion, Equifax, and Experian).
Understanding how your FICO® Credit Score works may help you make sense of changes in your credit score, alert you to possible errors on your credit record, and encourage you to think about how your borrowing behavior may impact your credit score and future borrowing situation.
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FICO® Credit Score Terms: Your FICO® Credit Score, key factors and other credit information are based on data from TransUnion® and may be different from other credit scores and other credit information provided by different bureaus. This information is intended for and only provided to Primary account holders who have an available score. See Discover.com/FICO about the availability of your score. Your score, key factors and other credit information are available on Discover.com. Customers will see up to a year of recent scores online. Discover and other lenders may use different inputs, such as FICO® Credit Scores, other credit scores and more information in credit decisions. This benefit may change or end in the future. FICO is a registered trademark of Fair Isaac Corporation in the United States and other countries.
Discover Financial Services and Fair Isaac are not credit repair organizations as defined under federal or state law, including the Credit Repair Organizations Act. Discover Financial Services and Fair Isaac do not provide “credit repair” services or assistance regarding “rebuilding” or “improving” your credit record, credit history or credit rating.
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Build Credit with Responsible Use: Discover reports your credit history to the three major credit bureaus so it can help build your credit if used responsibly. Late payments, delinquencies or other derogatory activity with your credit card accounts and loans may adversely impact your ability to build credit.
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Legal Disclaimer: This site is for educational purposes and is not a substitute for professional advice. The material on this site is not intended to provide legal, investment, or financial advice and does not indicate the availability of any Discover product or service. It does not guarantee that Discover offers or endorses a product or service. For specific advice about your unique circumstances, you may wish to consult a qualified professional.