Most credit scores – including the FICO score and VantageScore 3.0 – operate within the range of 300 to 850. Within that range, there are different categories, from bad to excellent. They generally look like this:
- Excellent Credit: 750+
- Good Credit: 700-749
- Fair Credit: 650-699
- Poor Credit: 600-649
- Bad Credit: below 600
There are many different credit scores available to lenders, and they each develop their own credit score range. Why is that important? Because if you get your credit score, you need to know the credit score range you are looking at so you understand where your number fits in. Here are the credit score ranges used by major credit scoring models:
- FICO Score range: 300-850
- VantageScore 3.0 range: 300–850
- VantageScore scale (versions 1.0 and 2.0): 501–990
- Experian’s PLUS Score: 330-830
- TransUnion New Account Score 2.0: 300-850
- Equifax Credit Score: 280–850
With all of the scores listed above, the higher the number the lower the risk. That means consumers with higher scores are more likely to get approved for credit, and to get the best interest rates when they do. And they are more likely to get discounts on insurance. What is considered a “high” score depends on what type of score is being used.
If your FICO score is 840, for example, you’re just 10 points shy of the highest score possible and your credit is “super-prime.” But if you have an 840 VantageScore 2.0, it’s not as spectacular because you’re 150 points away from the highest possible score.
To ensure your credit stays “good” in the long-term, it can help to pick one credit score and monitor your progress over-time. It also helps to pay attention to whatever is being cited as a “risk factor” — for instance, say, the amount of debt you’re carrying is too high — instead of a particular three-digit number. Addressing whatever is weighing down a single score will likely bolster your standing across scores. That’s because, while the exact credit score ranges may vary, most models are based on the same five categories:
- Payment History (accounts for 35% of most scores)
- Credit Utilization (accounts for 30% of most scores)
- Length of Credit History (accounts for 15% of most scores)
- Mix of Accounts (accounts for 10% of most scores)
- New Credit Inquiries (accounts for 10% of most scores)
Basically, the information in your credit reports is used to generate your three-digit credit scores, which are numerical representations of your creditworthiness. Because there are three major credit reporting agencies, and the information collected by them can vary, your credit scores may also vary depending on what bureau a lender is using to ascertain your credit history.
Beyond that, there are many different credit scoring models or formulas, which change from lender to lender. In fact, you’ve probably heard of a FICO score before — but you don’t have just one FICO score — you have dozens.
It’s a good idea to review your credit reports for the finer details influencing your credit scores, as well as to monitor your scores for any sudden changes, as these can be a sign of identity theft. Knowing your scores will help you have an idea of what types of terms and conditions you may qualify for on any lines of credit or loans.
The name FICO comes from the company’s original name, the Fair Isaac Co. It was often shortened to FICO and finally became the company’s official name several years ago.
To create credit scores, they use information provided by one of the three major credit reporting agencies — Equifax, Experian or TransUnion. But FICO itself is not a credit reporting agency.
Though FICO scores are the most widely used among lenders, there are other scores lenders can choose from, such as the VantageScore.
While FICO considers a wide range of information to come up with your credit scores, there is a lot of information that is not used. According to FICO, the scores do not consider anything that isn’t on your credit report, which includes your race, religion, national origin, sex, marital status and age. Here are some other things that FICO says it does not factor into its scores:
- Employment information, including your salary, occupation, title, employer, date employed or employment history
- Where you live
- The interest rates on your credit accounts
- Child or family support obligations
- “Soft” inquiries (requests for your credit report), which include requests you make to see your own credit reports or scores
- Any information that has not been proven to be predictive of future credit performance
- Participation in a credit counseling program
FICO has dozens of credit score models. Some are specific to what the consumer is applying for. For example, if you’re applying for an auto loan, your potential creditor may use a FICO score formula that gives significant weight to your history of making auto loan payments. Other models are customized for FICO’s clients.
Additionally, FICO updates its general formulas from time to time, with the most recent being the FICO 9 rollout in 2014. Paid collection accounts are not factored into FICO 9 scores, and unpaid medical collections have less of a negative impact on credit scores, compared to other credit scoring models and previous FICO algorithms.