FICO Score vs. Other Credit Scores (2024)

A credit score is a three-digit measure of how well you're managing your finances. The FICO score is one of several different types of credit scores lenders may use to gauge risk of a borrower.

Understanding the difference between credit scores and FICO scores can help you improve your score, which can help you get approved for loans at lower rates.

Key Takeaways

  • A credit score is a three-digit number that measures your financial health and how well you manage credit and debt.
  • FICO scores are a specific type of score that lenders can use when making borrowing decisions.
  • The FICO credit scoring system is the most widely used credit score.
  • FICO scores are calculated using the information included in your credit report.
  • Maintaining a higher credit score can make qualifying for loans and lines of credit easier, as well as help you land favorable interest rates.

What Is a Credit Score?

A credit score is a numerical representation of financial health, telling lenders at a glance how responsible you are with credit and debt. Generally speaking, a higher credit score suggests that you borrow and pay back what you owe on time. A lower credit score, on the other hand, may hint that you struggle with managing debt obligations.

So where do credit scores come from? Credit scores are generated by companies like Equifax, Experian, and TransUnion based on information that's included in your credit reports. A credit report is a collection of information about your financial life, including:

  • Your identity (i.e., your name, aliases, date of birth, Social Security number, etc.)
  • Existing credit accounts (such as loans, lines of credit, or credit cards)
  • Public records, including judgments, liens, or bankruptcy filings
  • Inquiries about you from individuals or organizations that have requested a copy of your credit file

Credit reports are maintained by credit bureaus. Equifax, Experian, and TransUnion are the biggest in the U.S. These companies compile credit reports based on information that creditors report to them as well as information that's available as part of the public record.

Tip

You can get a free copy of your credit report from each of the three credit bureaus once each year at AnnualCreditReport.com.

What Is a FICO Credit Score?

FICO credit scores are generated by Fair Isaac Corporation. These scores were first developed for consumer use in the late 1980s in response to the need for an industry-wide standard credit score for evaluating risk.

FICO scores are three-digit numbers ranging from 300 to 850, with 850 being the best score. FICO scores are calculated based on information included in consumer credit reports. There are five factors that go into the calculation:

  • Payment history: Payment history accounts for 35% of your FICO credit scores. On-time payments can be helpful to your score, while late or missed payments can result in lost credit score points.
  • Credit utilization: Credit utilization refers to the percentage of available credit that's in use at any given time. This factor accounts for 30% of FICO score calculations.
  • Credit age: Credit age measures the average length of time for which someone has been using credit. The older someone's credit age is, the better. This factor accounts for 15% of FICO credit score calculations.
  • Credit mix: FICO also considers the types of credit someone uses (i.e., installment loans versus revolving credit). Credit mix makes up 10% of FICO credit score calculations.
  • Credit inquiries: Credit inquiries account for 10% of your FICO credit score. A new inquiry is registered on your credit report following a hard credit check. Checking your own credit reports doesn't trigger a hard credit pull or affect your credit score.

FICO generates multiple versions of its credit scores, which are designed for different lending situations. It's possible to have 30+ different FICO credit scores depending on the information in your credit reports that's going into calculating them.

Note

FICO 8 and FICO 9, for instance, are widely used in credit decisions, while the newer FICO 10, which incorporates trended data, is used less commonly.

FICO Score vs. Other Credit Scores: Which Is Better?

Whether a FICO credit score is better than another credit score depends largely on how the scores are calculated and how they're being used. About 90% of top lenders use FICO credit scores to make credit decisions.

FICO scores focus on payment history, credit utilization, credit age, credit mix, and credit inquiries to give lenders an idea of how likely you are to pay back the money you borrow. Other credit scoring models may consider different factors to make the same determination.

VantageScores, for example, uses these factors:

  • Extremely influential: Credit usage, balance, and available credit
  • Highly influential: Credit mix and experience
  • Moderately influential: Payment history
  • Less influential: Age of credit history
  • Less influential: New accounts

Like FICO scores, VantageScores range from 300 to 850 while assigning different weights to payment history, credit usage, and other activity.

So in terms of which score is better, a lender might prefer to use FICO scores if they want to gauge how likely someone is to repay their debt. But if they're more interested in how much debt someone has and their credit utilization, they may use VantageScores instead.

Is a FICO Score the Same as a Credit Score?

A FICO credit score is a type of credit score. The difference between a FICO score and other credit scoring models is that FICO specifically develops FICO scores. The FICO credit scoring system uses a proprietary model to generate consumer credit scores based on five factors: payment history, credit utilization, credit age, credit mix, and credit inquiries.

Why Do I Have Different FICO Scores?

FICO offers multiple versions of its credit score for different uses. For example, lenders use one FICO credit score when applying for auto loans and another when applying for credit cards. FICO often updates its credit scoring models. They can also be different depending on which credit bureau is calculating them. If a creditor reports a loan account to one credit bureau but not the other two, that can affect the FICO credit scores each credit report generates.

Do Lenders Use FICO Scores or Other Credit Scores?

When you apply for loans or lines of credit, it's likely that a lender will check at least one of your credit scores. The majority of lenders rely on FICO credit scores, but it's possible that a lender may use an alternative credit scoring model when determining whether to approve you for a loan or line of credit.

How Can a FICO Score Improve?

The easiest ways include paying your bills on time, keeping credit card balances low, keeping old accounts open, using different types of credit, and limiting how often you apply for new loans or lines of credit.

The Bottom Line

FICO credit scores and other credit scores can serve as a predictive tool for lenders when gauging your ability and commitment to repaying debt. Regardless of which credit scoring model they use, it's important to consider how you can get the best score possible.

Some of the easiest ways to improve your FICO score, for instance, include paying your bills on time, keeping credit card balances low, keeping old accounts open, using different types of credit, and limiting how often you apply for new loans or lines of credit. The more you can improve your score, the easier it may be to get approved for loans at the lowest rates.

FICO Score vs. Other Credit Scores (2024)

FAQs

FICO Score vs. Other Credit Scores? ›

Your FICO® scores are just one type of credit score that lenders or creditors may use when determining whether they'll provide you a loan or credit card. While FICO® scores are commonly used by lenders to assess your credit risk, other credit scores can also give you a good idea of where you stand.

Which is better, FICO score or credit score? ›

"For years, there has been a lot of confusion among consumers over which credit scores matter. While there are many types of credit scores, FICO Scores matter the most because the majority of lenders use these scores to decide whether to approve loan applicants and at what interest rates."

Why is my FICO score so different from my other scores? ›

FICO® Scores are the credit scores used by most lenders, but different lenders may use different versions of FICO® Scores and some lenders (including Regions) may use different versions of FICO® Scores for different credit products, as discussed more fully here.

Which credit score is most accurate? ›

Simply put, there is no “more accurate” score when it comes down to receiving your score from the major credit bureaus.

Are there credit scores other than FICO? ›

FICO and VantageScore aren't the only two credit scoring models out there. Equifax, for example, has created its own credit scoring model—and unlike the 300-850 point scale used by the most popular FICO and VantageScore models, the Equifax model uses a 280-850 credit score scale.

Why is my FICO score 100 points lower than Credit Karma? ›

Your FICO Score is a credit score. But if your FICO score is different from another of your credit scores, it may be that the score you're viewing was calculated using one of the other scoring models that exist.

How close is the FICO score to the credit score? ›

Is "credit score" the same as "FICO® score"? Basically, "credit score" and "FICO® score" are all referring to the same thing. A FICO® score is a type of credit scoring model. While different reporting agencies may weigh factors slightly differently, they are all essentially measuring the same thing.

Is a FICO score of 8 good or bad? ›

FICO 8 scores range between 300 and 850. A FICO score of at least 700 is considered a good score. There are also industry-specific versions of credit scores that businesses use. For example, the FICO Bankcard Score 8 is the most widely used score when you apply for a new credit card or a credit-limit increase.

What is the true FICO score? ›

A true FICO score ranges between 300–850 and gets calculated using only information in a consumer's credit report maintained by the three main credit bureaus— Experian™, Equifax® and TransUnion®. To receive a FICO Score, you must have a credit account at least 6 months old and activity during the past 6 months.

Is FICO or TransUnion more accurate? ›

One credit bureau isn't more accurate than another, rather, they may simply have different methods of calculating your credit score. It's important to note that all three bureaus are used widely in the U.S. None of them are more “important” than the others.

What is the most damaging to a credit score? ›

5 Things That May Hurt Your Credit Scores
  • Making a late payment.
  • Having a high debt to credit utilization ratio.
  • Applying for a lot of credit at once.
  • Closing a credit card account.
  • Stopping your credit-related activities for an extended period.

What credit score do landlords use? ›

Most landlords use FICO credit scores to determine if an applicant qualifies for an apartment. The typical categories for those scores are: Exceptional: 800 to 850. Very Good: 740 to 799.

What credit score is needed to buy a house? ›

The minimum credit score needed for most mortgages is typically around 620. However, government-backed mortgages like Federal Housing Administration (FHA) loans typically have lower credit requirements than conventional fixed-rate loans and adjustable-rate mortgages (ARMs).

Why is my FICO score so different than my credit score? ›

The reason for the differences in FICO scores comes down to the differences in credit reports from each of the three major credit bureaus. For example, lenders might not report credit activity to all bureaus.

Do car dealerships use FICO? ›

The two big credit scoring models used by auto lenders are FICO® Auto Score and Vantage. We're going to take at look at FICO® since it has long been the auto industry standard.

What is a good credit score by age? ›

How Credit Scores Breakdown by Generation
Average FICO 8 Score by Generation
Generation20222023
Generation Z (ages 18-26)679 - Good680 - Good
Millennials (27-42)687 - Good690 - Good
Generation X (43-58)707 - Good709 - Good
2 more rows

Why is my FICO score lower than my credit wise score? ›

When the scores are significantly different across bureaus, it is likely the underlying data in the credit bureaus is different and thus driving that observed score difference.

Should I go by my FICO score or Credit Karma? ›

If you plan on applying for credit, make sure to check your FICO Score since there's a good chance lenders will use it to determine your creditworthiness. FICO Scores are used in over 90% of U.S. lending decisions.

What FICO score is considered very good credit? ›

Although ranges vary depending on the credit scoring model, generally credit scores from 580 to 669 are considered fair; 670 to 739 are considered good; 740 to 799 are considered very good; and 800 and up are considered excellent.

References

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