FICO® Score Basics

What is a FICO® Score?

A FICO® Score is a three-digit number calculated from the credit information on your credit report. Lenders use these scores to estimate your credit risk – how likely you are to pay your credit obligations as agreed. A FICO® Score assesses the information in your credit report at a particular point in time. It helps lenders evaluate your credit risk reliably, objectively, and quickly. And it helps you obtain credit based on your actual borrowing and repayment history, filtering out extraneous details such as race or religion.

FICO® Scores are the most widely used credit scores:

Experts estimate that when lenders get credit scores from credit bureaus, more than 90 percent of the time they ask for FICO® Scores.

FICO® Scores are used today in more than 20 countries on five continents as well as by the top 50 U.S. financial institutions, the 25 largest U.S. credit card issuers and the 25 largest U.S. auto lenders.

Your FICO® Score is one of many factors lenders consider when they make key credit decisions. Such decisions include whether to approve your application, what credit terms to offer you and whether to increase your credit limit once your credit account is established. Other factors lenders might use in making credit decisions include: information you provided on your credit application, how much you earn, your regular expenses, and how you manage your credit, checking and savings accounts.

Applying for credit

When you apply for credit, your FICO® Score can influence the credit limit, interest rate, loan amount, rewards programs, balance transfer rates, and other terms that lenders will offer you.

FICO® Scores are used by lenders in connection with a wide variety of credit products including:

  • Credit Cards
  • Auto Loans
  • Mortgages
  • Home Equity Lines & Loans
  • Personal Loans & Lines of Credit
  • Student Loans

Your FICO® Score can influence other decisions, too. Your score may be used when you apply for a cell phone account, cable TV and utility services.

Lenders can get your FICO® Scores from all three of the major U.S. credit reporting agencies (TransUnion, Equifax and Experian). Your score from each one may be different because the score is based solely on the specific credit information in that agency’s credit file.

How FICO® Scores Work

When you apply for credit, lenders usually order your credit report and FICO® Score. Your FICO® Score is calculated by a mathematical equation that evaluates many types of information in your credit report at the time the request is made. By comparing this information to the patterns in millions of past credit reports, your FICO® Score provides lenders a consistent and reliable indication of your credit risk.

FICO® Scores most often fall within a 300-850 score range1. Higher scores are considered lower risk, which can mean a lower interest rate for you, potentially saving you thousands of dollars per year in interest payments.

When a lender receives your FICO® Score, up to five “key factors” are also delivered. These key factors are the top reasons that your score wasn’t higher. Addressing some or all of these reasons can help you increase your score over time so that you are in a better position to qualify for credit or better terms in the future. For more information on some of the more common score factors, read our FICO® Score Factors Guide.

Each lender has its own standards for approving credit applications, including the level of risk it finds acceptable for a given credit product. There is no single “minimum score” used by all lenders. If you focus on keeping your FICO® Score in the mid 700’s or higher, you likely will qualify for the most favorable credit products and terms.

A high FICO® Score can be achieved by:

  1. making all payments on time each month
  2. keeping credit card balances low
  3. applying for new credit only when needed

Your lender may be able to give you specific guidance on the thresholds you need to meet to qualify for the credit product and terms you seek.


1 Some lenders use variations with slightly higher or lower scores possible.