In a Nutshell
FICO® scores are commonly used by lenders, but FICO® scores aren’t the only measure of where your credit stands. Here are some key things to know about the different types of credit-scoring models.
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. We’ll get more into those scores later.
- What is a FICO® score?
- How accurate is a FICO® score?
- Why is my FICO® score different from my credit score?
What is a FICO® score?
FICO — the Fair Isaac Corporation — is a company that creates specific scoring models used to calculate your scores.
The scoring models have been updated several times since they were developed in 1989. According to FICO, more than 90% of top lenders use FICO® scores. In addition to its base versions, FICO also offers industry-specific scoring models (and scores) for distinct credit products, such as auto loans, credit cards and mortgages.
How accurate is a FICO® score?
FICO scores are based on the information in your credit reports. The accuracy of your score will depend on factors such as which FICO Score model is being used; the credit bureau your report is pulled from; and whether your credit reports have up-to-date information. Errors on your credit report could also affect the accuracy of your FICO score.
Base FICO® scores range from 300 to 850 and are made up of the following credit score factors:
- Payment history: 35%
- Amounts owed: 30%
- Length of credit history: 15%
- New credit: 10%
- Credit mix: 10%
Depending on what your scores are, you may wonder what they mean. FICO defines the following credit ranges based on FICO® Score 8 credit scores:
- Exceptional: 800+
- Very good: 740 to 799
- Good: 670 to 739
- Fair: 580 to 669
- Poor: 579 and below
Industry-specific FICO® scores — including FICO® Auto Score 8 and FICO® Bankcard Score 8 — have a broader range of 250 to 900. These scores are tailored to specific types of credit.
There are several ways to get free access to your FICO® scores, including from various credit card issuers.
Why is my FICO® score different from my credit score?
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. Remember that though many lenders use FICO scores, some lenders and other credit score providers are using different proprietary methods to generate the credit score you are seeing. We’ll get into a few of those below.
VantageScore
VantageScore Solutions was created in 2006 as a joint venture of the three major consumer credit bureaus: Equifax, Experian and TransUnion. There are four VantageScore® models, and the latest, VantageScore® 4.0, uses a range of 300 to 850.
If you are viewing your score on Credit Karma, the score you see is VantageScore® 3.0. While VantageScore® credit scores aren’t used as widely as FICO® scores for credit decisions, they can still give you a good idea of where your credit stands. Remember, the VantageScore® model incorporates many of the same factors that are used when calculating your FICO® scores, although it may assign a different weight to certain factors.
Additionally, to generate a score for you, FICO requires that you have at least one account opened for six months or more and at least one account reported to the credit bureaus within the previous six months.
VantageScore, on the other hand, might be able to provide more people with credit scores by using just one month of history and one account reported within the previous 24 months.
According to VantageScore, more than 2,600 financial institutions use its credit scores. The scores are based on the following factors:
- Payment history: extremely influential
- Age and type of credit: highly influential
- Percentage of credit limit used: highly influential
- Total balances and debt: moderately influential
- Recent credit behavior and inquiries: less influential
- Available credit: less influential
Pretty similar to the factors that FICO evaluates, right?
Here are the ranges for the VantageScore® 3.0 credit-score model.
- Excellent: 781 to 850
- Good: 661 to 780
- Fair: 601 to 660
- Poor: 500 to 600
- Very poor: Below 500
Credit bureau proprietary scoring models
In addition to the FICO® and VantageScore® credit scores, each of the three national consumer credit bureaus offers its own proprietary credit scores. Because lenders typically don’t use these scores when making credit decisions, they’re often called “educational credit scores.”
For example, Experian offers the PLUS Score, which ranges from 330 to 830, and Equifax offers the Equifax Credit Score, which ranges from 280 to 850. Access to either of these scores may cost you.
Next steps
No matter what scores you look at, most do a good job of giving you an idea of the state of your credit. Staying on top of your credit scores can help you determine where you stand and steps you can take to improve your credit health.
If you check your credit scores regularly, you can keep track of how your scores are trending, work on building your credit history and address potential issues as they arise.
Credit Karma shows you the different credit factors that can affect your VantageScore 3.0 scores and where you can work to try to improve your credit. And if you opt for credit monitoring, Credit Karma will also send you alerts when there are important changes to your credit reports, which may help you spot potential errors or fraud. Using a service like this can give you tools to help you improve your credit.