The difference between FICO and other credit scores

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When lenders want to assess your credit risk, one of the important pieces of information considered is your credit score—or the three-digit signifier of a person’s creditworthiness.

There are a few different types of credit scores, but two known scoring models are FICO® Score and VantageScore.

What is a FICO Score?

FICO is named for Fair Isaac Corporation, the analytics company that introduced the flagship credit scoring model in 1989.

It’s not uncommon for consumers to think FICO® Score is synonymous with a credit score, given FICO® Scores are used in more than 90 percent of lending decisions. However, there are different types of credit scores (more than 1,000, in fact), and not all credit scores are FICO® Scores.

Due to the fact that there’s a wide variety of data to analyze and choose from depending on credit type when calculating credit scores, one consumer could have several FICO® Scores (which lenders might use to evaluate, depending on the type of loan or credit you’re seeking).

FICO’s credit score formula

The all-industry FICO® Score ranges from 300 to 850, and the higher the score, the more attractive you are to lenders as it indicates higher odds of repayment. Here’s a look at the FICO® Score ranges, according to myFICO:

  • Poor credit: 580 and under
  • Fair credit: 580 to 669
  • Good credit: 670 to 739
  • Very good credit: 740 to 799
  • Excellent credit: 800 and up

Below are the five categories, weighted according to importance, that help make up a FICO® Score:

Payment history: 35 percent

The largest chunk of your FICO® Score (35 percent) is based on payment history, and a solid reputation for making your payments on time each month—such as credit card bills and mortgage loan payments—is ideal. Any instances of bankruptcies, liens, repossessions, foreclosures or late payments may adversely affect your score.

Amounts owed: 30 percent

Thirty percent of your FICO® Score is based on the amounts you owe, also commonly referred to as credit utilization. It’s not a bad thing to have several credit accounts open at once, but owing too much money across various accounts could have a negative impact on your score.

As a rule of thumb, try to keep your credit utilization ratio (or the amount of total credit being used) under 30 percent. If you can, using as little as 10 percent of your credit line can be greatly beneficial to your score (though this may not be possible depending on your spending needs and credit limit).

Length of credit history: 15 percent

The length of your credit history accounts for 15 percent of your FICO® Score and considers the age of your credit accounts, the activity level of these accounts and more. Note, FICO also factors in the average age of your accounts and the age of the oldest account you own.

Knowing this, it’s important to think twice before closing accounts—such as canceling a credit card you no longer find a use for. Keeping a semi-dormant credit card account open, for example, and making small purchases (and subsequent payments) each month can strengthen your FICO® Score.

Credit mix: 10 percent

Ten percent of your FICO® Score is based on your credit mix or the variety of loans you own. Having a well-rounded mix of loans can signal to lenders you’re able to manage different types of credit (think: mortgages, credit cards and installment payments) and can have a salutary effect on your score, but note it’s not mandatory to own each type of available loan.

New credit: 10 percent

The last 10 percent of your FICO® Score is made up of recent searches for credit. In order to keep your new credit in check, refrain from applying for more than one loan at a time. Too many hard credit inquiries from lenders in a short period of time, for example, could indicate a risky borrower and impact your credit score. Note, however, your score won’t be affected by simply shopping for a loan across multiple lenders.

FICO Score and other credit scoring models

Another known credit score model is VantageScore, which was developed in 2006 and is owned by the three major credit bureaus: Equifax, Experian and TransUnion.

While most credit scoring models consider the same general information when calculating your score, there are a few main differences between a FICO® Score and VantageScore.

Firstly, FICO uses anonymized consumer financial data compiled by each of the three major credit bureaus and provides three bureau-specific scores. VantageScore uses a single model across all three credit bureaus to produce a credit score based on consumer financial data.

Given the differing consumer credit reporting bureaus and data, it’s important to note your credit scores may differ—and most likely does—across each credit bureau.

What score matters most to your lender?

According to leading financial industry analyst Mercator, FICO® Scores are used in over 90 percent of credit lending decisions in the United States—but that doesn’t mean your lender is guaranteed to evaluate just your credit score to approve you for a loan. Lenders use a variety of information and tools in addition to credit scores when evaluating your creditworthiness. It is important to track your credit score, understand the different versions available and confirm which one your lender is using for your application to prevent any surprises.

FICO, in particular, offers a range of scores depending on the type of loan you’re requesting (for example, applying for a credit card versus a car loan). This helps ensure lenders accurately evaluate your creditworthiness, in turn providing you with the line of credit you require. You can learn more about these scoring variants on myFICO’s FICO Score Versions page.

How to access your FICO credit score

There are a few ways you can access your FICO® Score, namely authorized FICO® Score retailers, such as Equifax, Experian and myFICO. Also, you can access your score for free through FICO® Score Open Access credit and financial counseling partners and the FICO® Score Open Access lender partners.

FICO Score Open Access Program

The FICO® Score Open Access Program, offered by credit counseling partners and lender partners, was developed so that partners may share FICO® Scores for use in credit counseling/education and lender evaluation scenarios for free with consumers.

According to FICO, over 200 financial organizations take part in this program, which effectively grants consumers free access to their FICO® Scores, including a breakdown of elements that affect your credit score.

Why it’s important to keep track of your credit score

When it comes down to it, regularly checking your credit score is key to overall financial health and ensures you know where you stand when applying for new lines of credit.

Additionally, any sudden movements in your credit score may indicate inaccurate reporting or potential fraud, allowing you to catch a potential mistake on your credit report and reverse it.

Learn more about where to access your credit score for free by reading Bankrate’s guide.

Written by
Claire Dickey
Editor, Product
Claire Dickey is a product editor for Bankrate, CreditCards.com and To Her Credit. Before joining Bankrate, Claire worked as a copywriter for brands within the telecommunications industry as well as a hybrid marketing and content writer.