FICO Score vs. Credit Score: What’s the Difference?

Susan Shain

Susan Shain | Blog

Aug 01, 2018

Credit scores can seem like a jumble of letters and numbers.

Maybe you heard a friend say “My FICO Score 8 for my TransUnion report is 712, but my VantageScore 3.0 from Experian is 820.”

What does all that mean?

While you know they’re important, it’s confusing to determine which scores matter, what the difference is, and where to find them.

In particular, you keep hearing about FICO scores vs. credit scores. So what’s the deal — are they the same thing? Is one more important than the other? Here’s what you need to know.

What to Know About FICO Score vs. Credit Score

Credit scores are numbers that banks use to evaluate your creditworthiness. They can affect your ability to get approved for a credit card, mortgage, or personal loan, as well as the interest rates you’ll pay on those loans.

When you have high credit scores, you’re an attractive borrower to financial institutions; when you have low scores, those institutions view you as more of a credit risk.

Credit scores usually range from 300 to 850, and contrary to popular belief, you don’t have just one. In fact, you probably have dozens of credit scores.

That’s because lenders can report your behavior to any (or all) of the major credit bureaus — Equifax, Experian, and TransUnion — so each might have different information about you in their credit reports. Credit scores are based on these individual credit reports, so each report can generate different scores.

Plus, there are also different companies that offer credit scoring models, one of which is called FICO.

FICO Credit Scores

So there you have it: A FICO score is just one brand of credit score. The reason you’ve heard about it is because it’s the most widely used. It was created by the Fair Isaac Corporation back in 1989.

Think of it this way: If credit scores were online stores, FICO would be Amazon. While there are other scores, 90% of “top lenders” use one of FICO’s scores in their lending decisions.

You don’t have just one FICO score, as lenders use different FICO scoring models for different purposes. They use some versions for credit card applications, for example, and others for auto loans.

FICO also updates its scoring models as times change. The newest version is the FICO Score 9, though most lenders still use the FICO Score 8.

Lastly, since you have a different credit report at each of the three bureaus, each report can result in different credit scores — even when the same scoring model is used to calculate the score.

VantageScore Credit Scores

If FICO credit scores are Amazon, VantageScore credit scores are Jet.com.

Created by the three credit reporting agencies, VantageScore has only been around for about a decade — but is growing in popularity.

It doesn’t take as long for users to generate a VantageScore credit score, which is a big advantage for consumers. Whereas FICO requires at least six months of data before giving you a credit score, you could get a VantageScore after just one month.

How to Check Your Credit Scores (Including Your FICO Scores)

Now that we’ve made all this fuss about FICO scores, you probably want to know what yours are, right?

Here’s are FICO Score 8 ranges according to FICO:

  • Excellent: 800 and above
  • Very good: 740-799
  • Good: 670-739
  • Fair: 580-669
  • Poor: 579 and below

These ranges are somewhat subjective, since lenders base their decisions on more than just credit scores.

To see where you fall, try the Discover Credit Scorecard, which gives a free FICO score to anyone who signs up for an account.

Or, for more options, here’s a list of all the places you can get your FICO scores for free. It also includes websites where you can get other free credit scores, like your VantageScores.

While you’re at it, you should probably check your credit reports. They’re what your credit scores are based on, so if they’re not correct, your credit scores won’t be either. You can get one free credit report per year, per bureau at AnnualCreditReport.com. You can also use services like Credit Karma to monitor two of your VantageScore 3.0 credit scores on a regular basis.

How Credit Scores and FICO Scores Are Calculated

All credit scores, including FICO and VantageScore, are based on similar credit scoring models. They assess factors like your credit history, payment history, credit mix, and credit utilization ratio.

Here’s the FICO scoring model:

FICO Score vs. Credit Score: What's the Difference?

FICO score breakdown from MyFico

If you’ve never used credit before, or have used it irresponsibly, your credit scores will be low or non-existent. A great way to build your credit from the ground up is with responsible use of a credit card, secured credit card, or credit-builder loan.

For those of you simply looking for a boost, here are a few easy ways to improve your credit:

  • Make on-time payments: Above all else, pay your bills on time. Late payments are incredibly detrimental to your credit scores. To avoid them, we recommend setting up automatic bill payments.
  • Reduce your credit utilization ratio: You can do this by spending less, paying off a credit card with a personal loan, or even asking to raise the credit limit on your current cards. Just make sure you’re responsible with these changes, and avoid spending more money than you did before.
  • Keep your credit cards open: Closing a card will increase your credit utilization, and eventually reduce the length of your credit history — both of which will reduce your scores. Unless you’re paying an annual fee, we advise keeping old cards open (even if you never use them).

Why FICO Scores and Credit Scores Matter

Credit scores affect all areas of your life.

A bad credit score can haunt you by making it difficult to rent an apartment, get an affordable mortgage, or land a job. Even if you’re able to qualify for a loan, your interest rates will be higher than if you had good credit scores.

And that has costly ramifications: On a $150,000 mortgage, for example, a 1% higher interest rate could cost you $31,000 over 30 years.

On the other hand, good credit scores open all kinds of doors. Not only will you find it easier to borrow money when you need it, they’ll also qualify you for lucrative credit card offers.

Yes, irresponsible credit card use can lead to a damaging debt spiral — but responsible credit card use (only charging what you can afford; paying your bill in full each month) can reward you immensely for your everyday spending.

If you have high credit scores, you could get cards like the Chase Sapphire Reserve Card (Review), which offers a signup bonus worth $1,500 in travel, or the Citi® Double Cash Card (Review), which offers 2% cash back on every purchase.

Not there yet? Don’t worry. Focus on building credit slowly and strategically. The best credit cards will be waiting for you when you’re ready.

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