Credit scores are three-digit numbers designed to help lenders assess credit risk. Many commonly used consumer credit scores range from 300 to 850. Lenders may use credit scores along with other information when evaluating applications and determining credit terms. Understanding how credit scores work can help you better understand your credit profile.
FICO vs. VantageScore
FICO and VantageScore are two different credit-scoring models. Both are widely used, but they are developed by separate companies and use different scoring methodologies.
FICO Score
Developed by the Fair Isaac Corporation (FICO). The most widely recognized scoring standard in consumer lending.
VantageScore
Developed jointly by the three major credit bureaus (Equifax, Experian, TransUnion). Increasingly used by credit monitoring services and some lenders.
Both models commonly use a 300–850 score range, but their scoring methodology and credit tiers are not identical. FICO category labels and ranges should not be applied to VantageScore, and vice versa.
What Makes Up Your FICO Score
FICO breaks down into five weighted categories:
- •Payment History (35%) — Whether you pay on time. The single most important factor.
- •Amounts Owed (30%) — Includes factors related to how much debt you owe and your use of available revolving credit.
- •Length of Credit History (15%) — Considers factors related to the age of your credit accounts and credit history.
- •Credit Mix (10%) — Variety of account types (credit cards, loans, mortgages).
- •New Credit (10%) — Recent applications and new accounts.
These percentages reflect their general importance for the overall population. The importance of individual factors can vary depending on a person's credit profile.
Credit Score Ranges
FICO uses five standard ranges:
- •**800–850: Exceptional**
- •**740–799: Very Good**
- •**670–739: Good**
- •**580–669: Fair**
- •**300–579: Poor**
VantageScore 4.0 uses its own tiers, which differ from FICO's:
- •**781–850: Superprime**
- •**661–780: Prime**
- •**601–660: Near Prime**
- •**300–600: Subprime**
These are VantageScore 4.0 tiers and should not be confused with FICO ranges.
How Lenders Use Your Score
When you apply for a credit product, a lender may obtain information from one or more of the three major credit bureaus and may use one or more credit scores as part of its evaluation.
Depending on the lender and product, credit scores and other underwriting information may help the lender determine:
- 1Whether to approve your application
- 2What credit limit or loan amount to offer
- 3What interest rate or other credit terms may apply
Each lender has its own underwriting criteria and risk models. Two lenders may make different decisions based on the information they review, the scoring models they use and their internal policies. A good credit score does not guarantee approval — issuers may also evaluate income, existing debts and their own eligibility criteria when deciding whether to extend credit.
Monitoring Your Score
You can access free weekly credit reports online from Equifax, Experian, and TransUnion through AnnualCreditReport.com.
It's important to distinguish between a credit report and a credit score:
- •Credit report — the underlying record of your credit history and account information.
- •Credit score — a number calculated from the information in your credit report.
AnnualCreditReport.com provides free credit reports, not a free FICO credit score.
Checking your own credit report does not hurt your credit score. When you review your own report, it generates a "soft inquiry," which has no effect on your score.
Many credit card issuers and lenders provide a free credit score to their customers through online accounts. The score provided may be a FICO Score, a VantageScore, or another model depending on the issuer. Credit monitoring services may provide a free VantageScore. When using any score service, check which scoring model is being shown, as you may have multiple credit scores depending on the model and bureau used.
Sources & References
The following resources from official organizations provide authoritative information on credit scores and credit scoring.
- •Consumer Financial Protection Bureau (CFPB) — What is a credit score?
- •myFICO — What is a FICO® Score and why is it important?
- •Consumer Financial Protection Bureau (CFPB) — When can a credit card company look at my credit reports?
Final Thoughts
Your credit score is not fixed. Changes in the information in your credit reports can affect your scores over time. Payment history and amounts owed are important FICO scoring categories, but the effect of any action can vary depending on your credit profile and the scoring model used.