A FICO Score is a three-digit credit score produced by Fair Isaac Corporation (FICO) from the information in a person's credit report. Its most common versions run from 300 to 850, with higher numbers indicating a lower likelihood of falling seriously behind on payments. US lenders use FICO Scores to decide whether to approve credit card, car loan and mortgage applications and at what price.
FICO does not hold any credit data itself. Each of the three US credit bureaus, Equifax, Experian and TransUnion, runs FICO's formulas on its own files, so one person has several FICO Scores that can differ. The main competitor is VantageScore, a model created in 2006 by the three bureaus. A consumer FICO Score is unrelated to the credit ratings that agencies assign to companies and governments, although both aim to rank default risk.
FICO Score in plain terms
Imagine a librarian deciding whether to lend a rare book. She cannot know the future, but she can look at the borrower's past: did they return books on time, how many are they holding now, how long have they been a member? A FICO Score boils that kind of history into a single number, so a lender can make a quick, consistent judgement instead of reading every page of the file.
The number is a ranking, not a verdict. It does not know your income or your character; it only compares your record with millions of others and estimates how people with similar records have behaved. That is why the same habits, such as paying on time and not running cards up to the limit, move almost everyone's score in the same direction.
History
Fair, Isaac and Company was founded in 1956 by engineer Bill Fair and mathematician Earl Isaac, and sold its first credit scoring system to a lender in 1958. Early systems were built for individual lenders. The first general-purpose FICO Score, usable by any lender, was launched in 1989 at Equifax and soon followed at the other bureaus. In the 1990s Fannie Mae and Freddie Mac began requiring FICO Scores for the mortgages they buy, which helped make the score a standard across US consumer lending.
FICO has released many versions since. FICO Score 8, released at the end of the 2000s, became the most widely used general version; FICO Score 9 and the FICO Score 10 family (including 10T, which uses "trended" data showing how balances move over time) followed. Older "Classic FICO" versions remained the requirement for mortgages sold to Fannie Mae and Freddie Mac. In July 2025 the Federal Housing Finance Agency announced that lenders could use VantageScore 4.0 instead of Classic FICO for those loans, with implementation tied to updates to the two companies' selling guides.
How the score is calculated
FICO keeps its exact formulas private but publishes the general weight of five categories for the population as a whole:
| Category | Approximate weight | What it looks at |
|---|---|---|
| Payment history | 35% | On-time and late payments, collections, bankruptcies |
| Amounts owed | 30% | Balances, especially use of revolving credit limits |
| Length of credit history | 15% | Age of oldest, newest and average accounts |
| New credit | 10% | Recent applications and newly opened accounts |
| Credit mix | 10% | Combination of cards, instalment loans and mortgages |
A key input under "amounts owed" is the credit utilisation ratio:
where is utilisation in percent, is the total of reported credit card balances and is the total of their credit limits. Someone with balances of $1,500 against limits of $5,000 has utilisation. Lower utilisation generally helps; paying only the minimum payment keeps balances, and therefore utilisation, high. Moving debt with a balance transfer does not reduce the total owed, so it changes utilisation only if limits change.
To produce a score, a file generally needs at least one account open for six months and at least one account updated in the past six months. People without such a history are called "credit invisible" or "thin file" consumers.
Score ranges and use in lending
FICO describes base scores roughly as follows: below 580 poor, 580 to 669 fair, 670 to 739 good, 740 to 799 very good, and 800 and above exceptional (some lenders and sites call this band excellent). Industry-specific versions for auto lending and cards use a wider 250 to 900 range. Lenders set their own cut-offs and pricing tiers; a borrower with a poor credit score may be declined or charged a much higher APR.
In mortgage underwriting, the score feeds directly into pricing adjustments, so a difference of a few dozen points can change the interest rate. The loose use of scores before 2008, in which borrowers with low scores received complex loans, was part of the sub-prime mortgage boom. Lenders also combine scores with income, debt-to-income ratios and, increasingly, cash-flow data, because a score alone measures credit risk only from past borrowing.
Criticism and limitations
Critics argue that FICO Scores exclude people who pay rent and utilities faithfully but have little formal credit, and that differences in access to credit can carry historical inequalities into the score even though protected characteristics are not used as inputs. Newer versions and some lenders now consider rent, utility and bank-account data, and payments on buy now, pay later plans are beginning to be reported. Others question FICO's dominant market position and pricing of scores for mortgage lenders, which was a factor in the US housing agencies' moves to accept competing models.
Scores are also only as accurate as the underlying reports. Errors, mixed files and identity theft can depress a score until corrected. Outside the US, FICO sells scoring models to lenders and bureaus in many countries, but national bureaus often run their own scores, such as the CIBIL score in India.