FICO Score
A FICO score is a three-digit number (300-850) that predicts how likely you are to repay borrowed money. Lenders use it to decide whether to approve your loan and what interest rate to charge you.
Created by the Fair Isaac Corporation in 1989, the FICO score has become the dominant credit scoring model in American lending. Over 90% of top U.S. lenders use FICO scores for credit decisions. Your mortgage rate, car loan terms, credit card limits, and sometimes even your insurance premiums and apartment applications depend on this number.
FICO Score Ranges
| Range | Rating | What It Means for Mortgages |
|---|---|---|
| 800-850 | Exceptional | Best rates available; smooth approval |
| 740-799 | Very Good | Near-best rates; strong approval odds |
| 670-739 | Good | Competitive rates; standard approval |
| 580-669 | Fair | Higher rates; FHA likely best option |
| 300-579 | Poor | Limited options; may need to rebuild before applying |
For mortgage purposes, the key thresholds are 580 (minimum for FHA with 3.5% down), 620 (minimum for most conventional lenders), and 740+ (where you get the best interest rates). Each 20-point improvement above 680 can drop your rate by 0.125-0.25%, which translates to real money. On a $350,000 loan, the rate difference between a 680 and 760 score saves roughly $100-$150 per month. Use our mortgage calculator to see how rate changes affect your payment.
What Makes Up Your FICO Score
| Factor | Weight | What It Measures |
|---|---|---|
| Payment history | 35% | Whether you’ve paid bills on time — single biggest factor |
| Amounts owed | 30% | How much of your available credit you’re using (utilization ratio) |
| Length of credit history | 15% | Average age of your accounts — older is better |
| Credit mix | 10% | Variety of account types (credit cards, auto loans, mortgage, student loans) |
| New credit | 10% | Recent applications and new accounts opened — too many is a red flag |
Watch out for: Closing old credit cards hurts your score two ways — it reduces your total available credit (increasing your utilization ratio) and eventually shortens your credit history. Keep old accounts open even if you don’t use them. A card with a $5,000 limit sitting in a drawer is helping your score.
FICO Score vs VantageScore
When you check your score through Credit Karma, your bank’s app, or a credit card statement, you’re often seeing a VantageScore — not a FICO score. VantageScore was created by the three credit bureaus (Equifax, Experian, TransUnion) as a competitor to FICO. Both use 300-850 ranges, but they weigh factors differently.
Your VantageScore and FICO score can differ by 20-40 points in either direction. Since mortgage lenders use FICO scores exclusively, the number on Credit Karma might not match what your lender sees. To get your actual FICO scores, check myfico.com or ask your lender which score they pulled during pre-approval.
Which FICO Score Do Mortgage Lenders Use?
Mortgage lenders pull scores from all three credit bureaus and use the middle score. If your Equifax score is 720, Experian is 740, and TransUnion is 710, your qualifying score is 720 (the middle one). For joint borrowers, lenders use the lower of the two applicants’ middle scores.
Most mortgage lenders currently use FICO Score 5 (Equifax), FICO Score 2 (Experian), and FICO Score 4 (TransUnion) — older model versions. The industry has approved a transition to FICO 10T and VantageScore 4.0 for conventional loans, which began phasing in during 2025-2026. These newer models incorporate trended data (how your balances have changed over time) and may score differently than the older versions.
How to Improve Your FICO Score
- Pay every bill on time, every month. Payment history is 35% of your score. One 30-day late payment can drop your score 50-100 points. Set up autopay for at least the minimum on every account.
- Drop your credit card utilization below 30%. If your cards have a combined $20,000 limit, keep balances under $6,000. Below 10% is even better. Pay down balances before your statement closing date — that’s when the balance gets reported to bureaus.
- Don’t close old accounts. Length of credit history is 15%. That store card you opened 12 years ago? Keep it open.
- Limit new applications. Each hard inquiry drops your score 3-5 points. Space out credit applications by 6+ months when possible.
- Check for errors. Pull your free reports at AnnualCreditReport.com and dispute any inaccuracies — wrong balances, accounts that aren’t yours, or late payments that were actually on time.
If you’re preparing to buy a home, start working on your score 6-12 months before applying. Get pre-approved to see where you stand and use our DTI calculator to check your debt-to-income ratio alongside your credit profile.
Frequently Asked Questions
Does checking my own credit score lower it?
No. Checking your own score is a “soft inquiry” and has zero impact. Only “hard inquiries” — when a lender pulls your credit for a loan or credit card application — affect your score. Check your own score as often as you want.
How long do negative marks stay on my report?
Most negative items remain for 7 years from the date of the delinquency. Chapter 7 bankruptcy stays for 10 years. The impact fades over time — a 3-year-old late payment hurts much less than a 3-month-old one. Foreclosures remain for 7 years and require a waiting period (3-7 years depending on loan type) before you can get a new mortgage.
Can I get a mortgage with a low FICO score?
Yes, but options narrow. FHA loans accept scores as low as 500 (with 10% down) or 580 (with 3.5% down). VA loans have no official minimum but most lenders want 620+. Below 580, you’ll need to work on your score before most lenders will consider your application.