Credit scores are unique-to-you numbers based on your credit history and financial activities over time. Your score is generated from credit report data and used by third parties to assess your creditworthiness as a borrower.
FICO score is among the most widely used credit scoring models. But is FICO score and credit score the same?
In this article, Western Shamrock explores the differences between FICO score vs. credit score since different credit-scoring companies have their own scoring models. Understanding the difference between FICO and credit score is crucial in assessing your financial position and understanding why you receive certain approval decisions, interest rates, and credit limits.
What is a Credit Score?
Many people wonder if FICO score is the same as credit score, and the answer is no, not exactly.
A credit score is a three-digit number that represents a borrower’s creditworthiness. The purpose of a credit score is to allow lenders, landlords, insurers, employers, and other parties to assess your financial reliability and ability to make on-time payments according to a schedule.
Different scoring models are available to generate credit scores, including FICO and VantageScore.
What is a FICO Score?
FICO stands for Fair Issac Corporation, a standardized credit scoring model that dates back to 1989. FICO score is one of the most widely used credit scores lenders use.
However, there are different versions of FICO scores, including industry-specific models like the FICO Auto Score and the FICO Bankcard Score.
How Are Credit Scores and FICO Scores Calculated?
To understand the answer to “Is FICO score same as credit score?” it’s important to know how these scores are actually calculated. Numerous factors go into general credit scores, yet FICO has its own specific mathematical formula.
General Credit Score Factors
- Payment history, including on-time payments and late or missed payments
- Credit utilization, which is how much available credit you are using
- Length of credit history, a measure of how long your accounts have been active
- Credit mix, the mixture of the types of credit you have like credit cards and personal loans
- New credit inquiries, such as recent applications for credit
FICO Score Calculation
- 35% – Payment history
- 30% – Credit utilization
- 15% – Length of credit history
- 10% – Credit mix
- 10% – New credit inquiries
FICO Score Ranges vs. Other Credit Score Ranges
When looking at credit score vs. FICO score, remember that all scoring models use number ranges. These ranges typically go from 300 to 850. However, specialty scores for automobiles and banks may dip as low as 250 and reach as high as 900.
Below, we share the FICO score ranges and the VantageScore ranges to show you how they compare and the terminology used.
FICO Score Ranges
- Exceptional – 800+
- Very Good – 740-799
- Good – 670-739
- Fair – 580-669
- Poor – Less than 580
VantageScore Ranges for Comparison
- Superprime – 781-850
- Prime – 661-780
- Near Prime – 601-660
- Subprime – 300-600
Key Differences Between FICO and Other Credit Scores
What is the difference between FICO and credit score? Here are some distinguishing characteristics to consider as you learn about how financial institutions will categorize you.
Scoring Model Differences
FICO and VantageScore take similar financial factors into account but weigh them differently. The higher the score, the better, regardless of the scoring model. However, some models put greater weight on certain parts of your credit history.
There are also differences between FICO score vs. credit score in how they are used. FICO is used by 90% of top lenders. However, VantageScore is more common for educational purposes and free credit score tracking.
Multiple Versions of Each Score Exist
It’s also important to know that lenders may use different versions of FICO scores for different purposes, such as automobile loans, mortgages, and credit cards. Meanwhile, VantageScore has multiple iterations, too, such as VantageScore 3.0 and 4.0.
Your Score Can Differ Across Platforms
Also noteworthy is the fact that different lenders can pull different scores for you at the same time. The model and bureau they use can reflect slight differences in your score.
Common Questions About FICO and Credit Scores
Now that you understand that credit score is not the same as FICO score, here are some other common questions borrowers ask.
Is My FICO Score the Most Important Score?
Many financial experts agree that FICO is the most important score because it is so widely used in lending decisions. It is important to focus on the scores that relevant lenders use so you can prepare for your financial future.
Why Is My FICO Score Different on Different Sites?
FICO scores come from data in your credit reports from the major credit bureaus. When lenders don’t report credit activity to all three bureaus, scores may vary based on the data each credit bureau has received.
Can I Improve My FICO Score the Same Way I Improve Other Credit Scores?
Yes, you can improve your FICO score just like you can with other credit scores. You can do this by keeping balances low, limiting new credit applications, and making payments on time. Check your credit report regularly for any errors, and report inaccuracies immediately to avoid adverse impacts on your FICO score and other credit scores.
Contact Western Shamrock for More Information
After reading this article, we hope you know the answer to “Is credit score the same as FICO” score?” and understand why the differences are important. FICO is just one of several credit scoring models available, but it is the widely used one and likely most important one to focus on if you’re looking to apply for a loan.
Monitoring your credit and understanding how scores impact lending decisions can help you be a responsible borrower and qualify for the best terms and rates when you need quick cash.
For further financial assistance, please contact a Western Shamrock branch near you or visit our FAQ page to learn more about installment loans.
