Definition
A FICO Score is a specific type of credit score created by the Fair Isaac Corporation. It's the most widely used credit score model by lenders, with over 90% of lending decisions using FICO Scores. FICO Scores range from 300 to 850, with higher scores indicating lower credit risk. The score is calculated using five key factors: payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%), and credit mix (10%). There are multiple versions of the FICO Score, with FICO Score 8 being the most commonly used, though specialized versions exist for specific types of loans like auto loans or mortgages.
Frequently Asked Questions
What's the difference between FICO Score and VantageScore?
Both are credit scoring models, but FICO is used by 90% of lenders. The models weigh factors differently, though both consider similar information. VantageScore was created collaboratively by the three major credit bureaus, while FICO is from a separate company.
Why do I have different FICO Scores?
You have different FICO Scores because: 1) There are different versions of the FICO scoring model; 2) Each credit bureau may have slightly different information about you; and 3) Industry-specific FICO Scores exist for auto loans, mortgages, etc.
How often does my FICO Score update?
Your FICO Score updates whenever new information is reported to the credit bureaus, which typically happens monthly when your creditors report your payment and balance information.
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