Your FICO® Score is one of many factors used by lenders to assess your creditworthiness. Usually, a higher score makes it easier to qualify for a loan, and it may result in a better interest rate.
Educational materials prepared by FICO are available to help explain FICO® Scores. To read these materials, go to ficoscore.com/education.
If you're a Basic Card Member with a Personal Card, you can view your FICO® Score for free through your online account.
We believe everyone should know their credit score and have the tools to understand it better. That’s why we’re giving you VantageScore® 3.0 by TransUnion®, and the key factors that affect your score for free, even if you are not an American Express® Card Member.
Credit scores can affect a great deal of what you’re able to achieve financially. Good credit scores can open the door to opportunities like homeownership, a new credit card or a personal loan. Low credit scores may block those opportunities.
If you’re interested in finding out your credit scores before applying for a loan or credit, you might wonder about the terminology and the types of credit scores. One type of score you’re likely to come across in your research is a FICO® credit score.
Key Takeaways
- A credit score is an overall metric that gives lenders a sense of how much risk they’ll be taking on by lending to you. One popular credit scoring company is FICO.
- FICO scores are used by lenders to assess your creditworthiness. A higher score can increase your chances of having your application for a loan or line of credit approved and help you receive lower interest rates and better loan terms.
- Your FICO scores are calculated based on your payment history, amounts owed, length of credit history, credit mix and any new credit accounts you may apply for.
- A good FICO score falls between 670 and 739.
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Sign Up TodayWhat Is a FICO Score?
A FICO score is a three-digit number calculated by the Fair Isaac Corporation that indicates a prospective borrower’s level of creditworthiness to lenders. Typically, scores range from 300 to 850.
The higher your score, the more favorable you will look to a prospective lender. It also likely means that your chances of getting approved for a loan or a line of credit will increase. It could also mean more favorable rates and terms on loans or credit.
Is a FICO Score the Same as a Credit Score?
Yes. A FICO score is one type of credit score that’s commonly used by lenders to gauge how risky it might be to lend to someone.
However, it’s important to note that FICO isn’t the only credit scoring company. And different credit reporting companies often take different approaches and use various models when calculating scores for consumers.
For example, Equifax®, Experian® and TransUnion®—the three main credit bureaus—founded VantageScore®, another credit scoring company.
Is a FICO Score Your True Credit Score?
While FICO scores are used by many financial institutions as they make lending decisions, there’s no one true credit score. There are a number of sources borrowers can use to access their credit scores. But the scores can vary depending on the credit scoring company, which model the company uses and when the score is calculated.
Why Is Your FICO Score Important?
Your credit score is a number that’s likely to be a significant deciding factor when you’re working with a lender. And the lender may be using FICO scores.
Whether you’re planning to buy a house, rent an apartment, lease a car or apply for a credit card, your credit score will likely be taken into consideration and play a direct role in your approval. Your credit score may also determine the interest rates and terms you’ll receive on a loan or line of credit.
If your score is deemed too low, lenders may not be willing to take the risk to approve you for credit. If you are approved, you might pay higher interest rates compared to those with higher credit scores. And that can add up over time.
What Factors Affect Your FICO Scores?
FICO has a few different scoring models that are currently in use. Many lenders still use the FICO Score 8 model, but FICO Score 9 and the FICO Score 10 suite have also been released in recent years.
That said, there are five key pieces of information that are used to calculate your scores in all of FICO’s scoring models: payment history, amount of debt, length of credit history, credit mix and new credit. Keep in mind, they all make up your FICO scores, so doing better in one area doesn’t guarantee a good credit score.
Payment History on Credit Accounts
Your consistency in making payments on credit accounts makes up 35% of your FICO scores. The more reliable you are with paying off the money you owe on a loan or line of credit on time, the higher your scores may be.
Credit Utilization Rate
The total amount of available credit you use is also one of the most significant factors in your FICO scores. It makes up 30% of the scores. The lower your credit utilization ratio, the more positive your scores could be.
Length of Credit History
The age of your credit accounts is also a factor in calculating your FICO scores. It represents around 15% of your score calculation.
Variety of Credit Accounts
In addition to the length of your credit history, FICO takes your credit mix into consideration when calculating your scores. The various types of credit accounts you use, which might include credit cards, a mortgage and installment loans, make up 10% of your FICO scores.
New Lines of Credit Being Opened
Opening a new line of credit can sometimes have a temporary negative effect on your FICO scores because it’s considered a hard inquiry. A hard inquiry can stay on your credit reports for up to two years. And while new credit makes up 10% of your scores, FICO only considers inquiries from the past 12 months, according to the credit scoring company.
What Is a Good FICO Score to Have?
FICO says a good score is one that falls between 670 and 739. Lenders may consider scores within this range to be at an acceptable level of risk. But scores are just one factor in lending decisions. And what FICO says may not affect lending decisions.
To increase your chances of being approved and potentially qualifying for lower interest rates and better terms for your loan or line of credit, it might be a good idea to work on improving your scores.
The score ranges below show more about how FICO sees its credit scores:
- Less than 580 is considered a poor score. It means your score is well below average, and most lenders are likely to see you as a high-risk borrower.
- Between 580 and 669 is considered a fair score. It means your score is below average, but you still may be likely to get approved for some loans and lines of credit.
- Between 670 and 739 is considered a good score. That means your score falls within the average—or slightly above average—range. Your chances of getting approved for a loan or line of credit are good, but you may not receive optimal interest rates or loan terms.
- Between 740 and 799 is considered very good. It means your score is above average, and you’re more likely to qualify for good interest rates and loan terms with lenders.
- A score of 800 and above is considered exceptional. Your score is nearly perfect, and you’re more likely to receive some of the most favorable interest rates on loans and lines of credit.
How to Check Your FICO Scores
If you want to find out what your current FICO credit scores are, there are a few ways to do so. Accessing scores through your bank or credit card issuer, credit monitoring services, and personal finance apps are just some of the options.
FICO Scores in a Nutshell
Credit scores are used by lenders to assess the risk level and creditworthiness of borrowers, and many lenders use FICO scores. That’s why it can be helpful to be aware of what your scores are before making any big financial decisions. It can help you set realistic expectations of what you might be able to get approved for and whether you’ll need to take steps to improve your financial standing before applying for credit.
In order to have a well-rounded sense of the state of your credit, it can also be helpful to monitor your credit reports. To monitor your VantageScore and your TransUnion credit reports, you may want to consider CreditWise from Capital One. It’s free, whether you are a Capital One cardholder or not, and it won’t hurt your credit scores.
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Your CreditWise score is calculated using the TransUnion® VantageScore® 3.0 model, which is one of many credit scoring models. It may not be the same model your lender uses, but it can be one accurate measure of your credit health. The availability of the CreditWise tool depends on our ability to obtain your credit history from TransUnion. Some monitoring and alerts may not be available to you if the information you enter at enrollment does not match the information in your credit file at (or you do not have a file at) one or more consumer reporting agencies.