Your FICO score is the most widely used credit score in the United States. Lenders use it to decide whether to approve your loan application and at what interest rate. Understanding how it’s calculated gives you a clear roadmap to improving it. Here is exactly how your FICO score works in 2026.
What Is a FICO Score?
FICO stands for Fair Isaac Corporation, the company that developed the scoring model in 1989. Your FICO score is a three-digit number ranging from 300 to 850. The higher the number, the more creditworthy you appear to lenders. More than 90% of top lenders use FICO scores when evaluating loan and credit applications.
There are dozens of FICO score versions, including industry-specific scores for auto loans (FICO Auto Score) and credit cards (FICO Bankcard Score). When most people refer to “a credit score,” they mean a FICO Score 8 or FICO Score 9, the most widely used general-purpose versions.
FICO Score Ranges
- 800–850: Exceptional — Best rates available, approval likely across all credit products
- 740–799: Very Good — Competitive rates, strong approval odds
- 670–739: Good — Near-prime; most lenders will approve at decent rates
- 580–669: Fair — Subprime rates; harder to get unsecured credit
- 300–579: Poor — Very limited options; secured cards and credit-builder loans may be the path forward
The 5 Factors That Make Up Your FICO Score
1. Payment History (35%)
The single largest factor. It tracks whether you’ve paid past credit accounts on time. Late payments, collections, bankruptcies, and charge-offs all damage your score. A payment that is 30 days late is a serious mark; 60 and 90 days late are progressively worse. Even one missed payment on an otherwise clean file can drop a score by 50 to 100 points.
The fix: pay every bill on time, every time. Set up autopay for at least the minimum payment so you never miss a due date.
2. Amounts Owed / Credit Utilization (30%)
This measures how much of your available revolving credit you are using. If you have a $10,000 credit limit and carry a $3,000 balance, your utilization is 30%. FICO evaluates this both overall and per individual card.
The target: keep utilization below 30% on each card and in total. Below 10% is ideal for excellent scores. Pay down balances before your statement closing date, since that is when balances are typically reported to the bureaus.
3. Length of Credit History (15%)
FICO considers the age of your oldest account, the age of your newest account, and the average age of all accounts. Longer history is better. This is why closing an old credit card can hurt your score — you lose that account’s age from your average.
The strategy: keep old accounts open, even if you rarely use them. A small annual charge on an old card keeps it active and preserves its history.
4. Credit Mix (10%)
Having a variety of credit types — credit cards, auto loan, mortgage, student loan — shows you can manage different kinds of credit. This factor matters less than the others, but a credit file with only one type of account may be scored slightly lower than one with a mix.
Do not open new accounts just to diversify. The benefit is modest and the inquiry and new account age reduction can offset it.
5. New Credit / Hard Inquiries (10%)
When you apply for new credit, the lender pulls your credit report. This is called a hard inquiry and temporarily reduces your score by a few points. Multiple hard inquiries in a short window (outside of rate shopping for a single loan) suggest financial stress and reduce the score further.
Rate shopping for mortgages, auto loans, or student loans within a 14 to 45 day window is treated as a single inquiry by FICO. Credit card applications are each counted separately.
What Is NOT Included in Your FICO Score
FICO scores do not consider:
- Income or employment status
- Age, race, gender, or national origin
- Bank account balances or savings
- Soft inquiries (checking your own score, pre-approval checks)
- Rent, utilities, or phone payment history (unless specifically reported via programs like Experian Boost or UltraFICO)
FICO vs. VantageScore
VantageScore is FICO’s main competitor. It’s developed jointly by Equifax, Experian, and TransUnion. Many free credit score tools — including Credit Karma — show VantageScores. Both use 300–850 ranges and similar factors, but the weighting differs. Your FICO and VantageScore may vary by 20 to 50 points. When a lender says they pull your “credit score,” confirm which model they use.
How to Check Your FICO Score for Free
- AnnualCreditReport.com: Free credit reports from all three bureaus (Equifax, Experian, TransUnion), now available weekly
- Experian.com: Free monthly FICO Score 8 through Experian’s consumer portal
- Your credit card: Many issuers including Discover, American Express, and Citibank provide free FICO scores monthly on your statement or app
How Long Negative Items Stay on Your Report
- Late payments: 7 years
- Collections: 7 years from the date of first delinquency
- Chapter 7 bankruptcy: 10 years
- Chapter 13 bankruptcy: 7 years
- Hard inquiries: 2 years (but impact typically fades after 12 months)
Bottom Line
Your FICO score is built from five factors, but payment history and credit utilization together account for 65% of the total. Pay on time, keep balances low, and let your accounts age. Checking your credit report regularly lets you catch errors — which are more common than you’d expect — and dispute them before they cost you on a loan application.