30-07-2025
What is a FICO score, and why should you know yours?
Several companies calculate credit scores, but one stands out as the gold standard: Fair Isaac Corporation (FICO), the company that invented the credit score algorithm in 1989.
FICO credit scores are calculated by using the information in your credit reports, and they're used by the majority of creditors to make decisions about whether you qualify for mortgages, credit cards, loans, and more.
As a credit expert and former NFCC-certified credit counselor, here's what I want you to know about your FICO credit scores.
How are FICO credit scores calculated?
A FICO credit score is a three-digit number that reflects the information in your credit reports.
You can think of them like letter grades that reflect how well you performed in a class. Except instead of English or History, the subject is Debt Management, and the grades range from 300 (which is equivalent to an "F") up to 850 (which is a perfect "A+").
FICO creates your credit scores by taking the details of your debt and running it through one of their many credit score algorithms. Scores are based on five key categories, each weighted differently:
Payment history (35%): The most heavily weighted credit score factor evaluates whether you pay your bills on time. Late payments, defaults, charge-offs, collections, bankruptcies, and foreclosures can significantly lower your scores.
Amounts owed (30%): This factor focuses on how much of your available credit you're using, also known as your credit utilization ratio. For example, if you have $5,000 in available credit and currently carry a balance of $1,500, your utilization is 30%.
Length of credit history (15%): This measures how long your accounts have been open, as well as the average age of accounts. The longer your credit history, the better.
New credit (10%): This looks at how many new accounts you've opened recently and how many hard inquiries are listed on your credit reports. Too many hard credit checks in a short period can hurt your scores.
Credit mix (10%): Finally, your credit mix evaluates how many different types of credit you have experience using (credit cards, installment loans, mortgage, auto loan, etc.). You don't need every type of account to have good credit, but a variety shows you can manage different forms of debt responsibly.
If you have a long history of paying your debt as agreed, and you keep your borrowing to a minimum, you're likely to have good FICO scores.
Read more: 8 factors that don't affect your credit scores
Types of FICO scores
It's important to understand that you have multiple credit scores, including different types of FICO scores. Your particular credit profile can produce different FICO scores depending on the version being used and which credit bureau (Experian, Equifax, or TransUnion) is reporting the information.
FICO Score 8 is the most commonly used version today. However, there is a newer version known as FICO Score 9, which places less weight on medical collection accounts and completely ignores paid collections. In 2020, FICO released FICO Score 10 and 10T, which are meant to be even more precise when it comes to determining risk but have been slow to roll out among lenders.
Older versions, such as FICO 2, 4, and 5, are also often used by mortgage lenders because these scores are hard-coded into Fannie Mae and Freddie Mac's underwriting systems.
In addition to these base scores, FICO also has industry-specific scores, which use a range of 250 to 900. For instance, FICO Auto Scores are used by auto lenders to evaluate car loan applicants and weigh your history with auto loans more heavily. Meanwhile, FICO Bankcard Scores are used by credit card issuers and place more emphasis on your revolving credit history.
Read more: VantageScore vs. FICO: How these two major credit scoring models compare
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How to improve your FICO scores
One of the most common questions I hear about credit scores is, "How do I improve my credit scores fast?"
The truth is, there's no way to improve your credit scores overnight, and it can take decades to achieve a perfect 850 credit score. However, there are a couple of ways you might be able to make significant FICO score gains over the course of a month or more.
Plus, you can also practice good debt management habits to build and maintain good credit scores throughout your lifetime. Here are some strategies that work.
Become an authorized user
When you're in a hurry to increase your FICO scores, one of the best options I can recommend is to see if a loved one will add you to their credit card as an authorized user.
With credit cards, an authorized user is someone who is not legally liable for the debt, but is still authorized by the main cardholder to use the account.
When you become an authorized user, the information about the credit card will appear on your credit reports and be used to calculate your scores.
That includes the past payment history, amount owed, and other account details. So, for this approach to work, the primary cardholder has to have a positive history with the account.
Reduce your credit utilization
One of the only other ways to gain FICO score points fast (30 to 45 days at minimum) is to reduce your credit utilization. The lower the percentage of available credit you're using, the better it is for your scores.
There are two ways you can make improvements to your credit utilization. If possible, I recommend using a combination of both strategies to accelerate your progress:
Pay down your credit card balances as low as possible. Ideally, pay off the full balance each month.
Log into your credit card account and request a limit increase once a year (but don't increase your balances).
Make debt payments on time
Of the five categories that impact your FICO credit scores, the most important one is your payment history. When it comes to this area of your credit, slow and steady wins the race. You can build up good credit by making sure you pay at least the minimum amount due on your debt accounts, on or before the due date, every single month.
Review your credit reports
Finally, be sure to monitor the information in your credit reports, as it can directly impact your credit scores.
You can pull your credit reports for free on a weekly basis from Be sure to review them for errors, such as payments that are incorrectly reported as late. You can file free disputes to fix any errors you find.
Read more: This map highlights the average credit score in every state
Frequently asked questions (FAQs)
What is a FICO score in simple terms?
A FICO score is a credit score that's calculated by a company called Fair Isaac Corporation (FICO).
What is a good FICO score?
According to FICO, most creditors will consider your scores "good" if they fall between 670 and 739 (on a scale of 300 to 850).
What is my FICO score vs. credit score?
There are several companies that calculate credit scores, including VantageScore and some of the credit bureaus, but it's only a FICO score if it's calculated by Fair Isaac Corporation.
