Whether you’re new to credit or have been borrowing money for a few years, you’ve probably seen the term FICO® Credit Score, yet you may not be sure of what it means. Understanding the basics of your score and how it impacts your credit may help you better understand lender decisions, and help you make wiser choices when it comes to managing your credit and setting useful financial goals. Here’s what you need to know about FICO® Scores.

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FICO® Scores are three-digit numbers calculated from the credit information on your credit report at a consumer reporting agency (CRA) at a particular point in time. It summarizes information in your credit report into a single number that lenders can use to assess your credit risk quickly, consistently, objectively and fairly.

FICO® Scores most often fall within a 300–850 score range, and higher FICO® Scores are considered lower risk, while lower FICO® Scores indicate higher risk. There is no single “minimum FICO® Score” used by all lenders to qualify you for a loan, but in general higher FICO® Scores can put you in a better position to qualify for credit or better terms.

What Impacts Your FICO® Credit Scores

FICO® Scores are calculated based on these five categories of information from the consumer’s credit report:

  1. 35% of your score is based on payment history
  2. 30% is based on amounts you owe
  3. 15% comes from the length of your credit history
  4. 10% represents new credit
  5. 10% is based on credit mix in use types of credit1

The importance of these categories may vary for different credit profiles.

Why FICO® Scores are Important

Your FICO® Scores are important because lenders use these scores to estimate your credit risk—how likely you are to pay your credit obligations as agreed. They also help you obtain credit based on your actual borrowing and repayment history, without consideration of protected types of information such as race or religion.

While it is just one factor lenders may use in a lending decision, it may impact all of your credit, such as credit card interest rates, mortgages and car loans.2

FICO® Scores vs. Educational Scores

More than 90 percent of lenders use FICO® Credit Scores in their lending evaluation process, but there are other credit scores as well, often referred to as educational scores. These credit scores do not use the same calculations as the FICO® Score, therefore the educational scores may vary greatly from FICO® Scores.3

It’s important to understand that a credit score represents the information found on the credit report at one bureau at a specific point in time, and that the information may not be the same at each. This is why one person may see different FICO® Scores when comparing their scores provided by TransUnion, Equifax, or Experian.3

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Understanding how your FICO® Credit Score works may help you make sense of changes in your credit score, alert you to possible errors and encourage you to think about how your borrowing behavior may impact your credit score and future borrowing situation.



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FICO is a registered trademark of the 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.