Advertiser Disclosure

Advertiser Disclosure

The credit card offers that appear on are from credit card companies from which this site possibly receives compensation. This compensation may impact how and where credit card offers appear on this site. This site possibly does not include all available credit card offers.


Everything You Need to Know About a Fico Score

- Jan 30, 2022 credit, Credit Scores4 comments

If you recently applied for a credit card, mortgage, etc.,  you probably bumped into a 3 digit number called your FICO score. What in the world does that three-digit number mean? In this post, we will discuss everything you need to know about Fico scores. Let’s jump in.

Who is FICO?

The company FICO  (Fair Isaac and Co.) was founded in 1956 by engineer Bill Fair and mathematician Earl Isaac. Nowadays, it is a public company traded on the New York Stock Exchange. FICO is not owned by the US government.

What is a FICO score?

A FICO score is a three-digit number ranging from 300 to 850. The score determines how odd it is for the person to default on a loan. The higher your score basically says that FICO determined that based on the information on your credit report it is less likely for you to default on a loan. The same is true vice versa. 

Is FICO one of the credit bureaus?

No. FICO is a scoring model, not a credit bureau. Credit bureaus are the ones that create your credit report by collecting the information about you from lenders. The three popular credit bureaus are Experian, TransUnion, and Equifax. Fico is a scoring model that takes the information from your credit report (collected by the credit bureaus) and based on the info, calculates your credit score. 

How does FICO calculate a score?

FICO collects data from millions of consumers and figures out which consumers who had any given factors on their report, ended up being 90 days late or more on a loan. Based on these facts, they will determine, using the information found on your credit report, how likely you are to default on a loan.

For example, let’s say in your history you had two 60 day late payments. FICO will see these late payments on your credit report and compare this information to millions of other consumers who also had two 60 day late payments in the same or similar pattern as you. Then FICO will figure out how many of those consumers ended up being 90 days late on a loan and based on those numbers, they will calculate your credit score. (Of course, FICO will take into consideration a lot of other things, like how many positive accounts you have etc. I just wanted to give you a quick and easy example.)

What are the main factors that FICO will look at?

Even though FICO keeps its credit formula highly confidential, these five factors are known to have the biggest impact on your FICO score.

  • Timely Payments= 35% of the FICO score
  • Credit Utilization = 30% of the FICO score
  • Credit History= 15% of the FICO score
  • Credit Mix = 10% of the FICO score
  • New Credit=10% of the FICO score
The 5 Most Important Factors In A FICO Score

Every self-proclaimed guru on Google has “5 reasons why blah blah blah”.  But now I’m about to give you 5 REAL factors that FICO looks at when calculating your credit...

Read Post

Is FICO the only scoring model?

No. There are other scoring models out there, like Vantage score, and others.  But FICO is by far the biggest and most widely used. FICO claims that the stunning numbers of over 90% of lenders use the Fico score model when making lending decisions!

Why Are My Credit Scores Different?

When people check their credit score, should it be by Credit Karma or on their Discover statement, etc., they look at the three-digit number. They take it as a fact th...

Read Post

Does FICO have only one scoring model?

No again. FICO has several scoring models (actually, there are over 50 FICO scoring model versions!!).  Fico 09 is the newest but a new scoring model called  Fico 10 will be released shortly

All of the scoring models are used daily in lending decisions and every scoring model will result in a slightly different FICO score.

accurate credit score
Where Can I Find The Most Accurate Credit Scores?

What’s sweat-inducing, hair-raising and spine-chilling for men and women alike? Credit scores. Yep, those intangible & non-physical numbers that determine our lend...

Read Post

Does every person have a FICO score?

No. In order for FICO to be able to calculate a score, you must have an open trade line for at least six months. And the account must have been active within the last six months.

What is a good FICO score?

According to FICO, the following is how your credit score ranges.

Rating Description
<580 Poor This credit score is well below the average score of U.S. consumers and demonstrates to lenders that the borrower may be a risk.
580-669 Fair This credit score is below the average score of U.S. consumers, though many lenders will approve loans with this score.
670-739 Good This credit score is near or slightly above the average of U.S. consumers and most lenders consider this a good score.
740-799 Very Good This credit score is above the average of U.S. consumers and demonstrates to lenders that the borrower is very dependable.
800+ Exceptional This credit score is well above the average score of U.S. consumers and clearly demonstrates to lenders that the borrower is an exceptionally low risk.

How do I build a good FICO score?

Building good credit is lifetime work. Here are the things to always keep in mind:

  • Be careful never to miss any payments on any loans
  • Never have credit card balances above 9% of your credit limits
  • Don’t open new accounts too frequently
  • Never close your oldest two or three cards
Frequently asked questions
My score dropped by 9 points. What can be the reason?
Scores always go up and down. A 9 point drop is nothing to be concerned about. It's like a heart rate which always fluctuates. Do you run to the doctor every time your heart rate goes down a drop? 

Was this article helpful?

Sam Sam has nearly a decade's worth of experience educating his many readers on everything credit. Sam spends his days checking out credit cards for a full report, from the minute benefit details to the shebang of welcome bonuses. Plus studying the ins and outs of building proper credit. It’s his favorite pastime and he loves sharing it with others.

Leave A Comments

This site uses Akismet to reduce spam. Learn how your comment data is processed.


  1. The reason for this is that it allows them to recoup the loan, should the borrower default. Title loan lenders also prefer that vehicles not be much older than 10 to 15 years.

    • Jannie please be more specific to what your referring too.

  2. Thanks for these pointers. One thing I also believe is that often credit cards presenting a 0 interest rate often bait consumers with zero rate of interest, instant authorization and easy on-line balance transfers, nevertheless beware of the real factor that will certainly void your current 0 easy street annual percentage rate and to throw one out into the very poor house quick.

    • Check out this post for more information on Intro O% APR credit card offer – link


Recent Posts

Follow us

Click here to subscribe to
our WhatsApp channel

best offers

Ink Business Preferred Credit Card

Earn 100,000 points after spending $15,000 within the first 3 months.

more info

New Business Card! Ink Business Premier(SM) Credit Card

Earn $1,000 after spending $10,000 within the first 3 months.

more info

The Hilton Honors American Express Business Card

Earn 150,000 points plus a Free Night Reward after spending $4,000 within the first 3 months (terms apply).  Expires 07/19/23.

more info

The Business Platinum Card from American Express

Earn 150,000 points after spending $15,000 within the first 3 months.

more info

You May Also Like

Good Credit Cards To Choose For Starting To Build Credit

Good Credit Cards To Choose For Starting To Build Credit

Applying for your first credit card can seem daunting. There are so many cards to choose from and there is always the risk of getting declined. Here are some points to consider when choosing your first credit card and also some direction of which cards to choose to...

read more
Piggybacking Credit- Everything You Need to Know

Piggybacking Credit- Everything You Need to Know

Piggybacking credit is having a third party, a creditworthy individual, add you to their credit card as an authorized user. This allows you to receive the credit benefits from that account, helping you improve your own credit score fast.

read more

Download link sent

Got it * please check your promotional inbox

Error sending download link

Try Again