Credit & Debt

What is FICO Score?

FICO is the credit scoring model used in over 90% of U.S. lending decisions. Developed by the Fair Isaac Corporation, it evaluates your credit risk by analyzing data from your credit reports.

The FICO formula uses five factors: payment history (35%), amounts owed or utilization (30%), length of credit history (15%), credit mix (10%), and new credit inquiries (10%). Scores range from 300 to 850.

Different versions of FICO are used for different types of lending. Mortgage lenders use FICO Scores 2, 4, and 5. Credit card issuers typically use FICO 8 or 9. The newer FICO 10 and 10T incorporate trended data, looking at your behavior over time instead of a single snapshot.

Quick Facts

Weight of Payment History35% of total FICO score

Weight of Amounts Owed30% (primarily credit utilization)

Industry PrevalenceUsed in over 90% of U.S. lending decisions

Common Scale300 to 850 points

PRACTICAL EXAMPLE

A consumer's FICO Score increases from 710 to 760 after they pay off a credit card balance, lowering their overall credit utilization. This adjustment changes their credit tier from 'Good' to 'Very Good,' qualifying them for lower interest rates on auto loans.

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RELATED TERMS

Learn More Key Concepts

Credit ScoreA three-digit number that tells lenders how likely you are to repay borrowed money.

Credit ReportA record of your borrowing history, including accounts, payments, and public records.

Credit UtilizationThe ratio of a borrower's outstanding revolving credit card balances compared to their total available credit limit.

Hard InquiryA credit report check initiated by a lender when a consumer applies for new credit, which can affect credit scores.

Credit LimitThe maximum amount of revolving credit a lender permits a borrower to carry on a credit card or line of credit.

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Disclaimer: NetWorthFlow provides financial calculators, simulators, and projection tools for informational and educational purposes only. None of the calculations, data, or results displayed on this website constitute professional financial, investment, tax, or legal advice. All calculations are mathematical models based on user-supplied variables and general assumptions, which may not reflect real-world market outcomes. Always consult with a certified financial planner, licensed investment advisor, or qualified tax professional before making any financial decisions.

Automated tools are not a substitute for professional counsel. We strongly advise that you consult a qualified Certified Financial Planner (CFP®), Registered Investment Adviser (RIA), Certified Public Accountant (CPA), or legal expert before making significant decisions regarding taxes, mortgages, retirement planning, investments, or debt management.