Most FICO-score explainers either oversimplify (“pay your bills on time”) or drown you in math. This is the middle version: enough detail to actually make decisions, without the jargon that makes your eyes glaze over. Updated for 2026 — because there’s more than one FICO score, and knowing which one your lender uses matters.
TL;DR
- FICO is a brand of credit score, not the only score. VantageScore is the other major one.
- Your FICO has 5 factors, but 2 of them (payment history + utilization) drive 65% of your number.
- There are multiple FICO versions — FICO 8, FICO 9, FICO 10 — and lenders use different ones for different decisions.
- The credit score you see on your bank’s app is usually NOT the same score your mortgage lender will pull.
What FICO actually is
FICO is a company — the Fair Isaac Corporation — that creates credit scoring models. Lenders subscribe to FICO and buy your score when you apply for credit. The “score” is a number between 300 and 850 predicting your likelihood of paying a debt on time.
There are also other credit score brands:
- VantageScore — developed by the three bureaus themselves; competes with FICO
- PLUS Score — Experian’s consumer-facing score
- Various proprietary scores — some lenders build their own
The score you see on Credit Karma is a VantageScore. The score Chase sees when you apply for a card is a FICO Score 8 (usually). These can differ by 20-60 points. Neither is “wrong” — they’re different products.
The 5 factors (and what they actually mean)
1. Payment history — 35%
Whether you’ve paid your bills on time. One 30-day late payment on a mortgage can drop a 780 score by 90-120 points. One 30-day late on a credit card drops a 780 by 60-100 points. Severity + recency + frequency matter.
What counts as “late”: 30 days past the due date. Paying 5 days late doesn’t show up on your credit report; paying 30 days late does.
How it builds: Every on-time payment is a small positive. Over years, it compounds into the dominant factor in your score.
2. Credit utilization — 30%
The percentage of your credit card limits that you’re using on the statement date. The lower, the better — aim for under 10%.
This factor is covered deeply in Boost Credit Score 30 Days and Statement Date vs Due Date. It’s the single biggest fast-move lever.
Key point: Utilization is calculated two ways — overall (across all cards) and per-card. Both matter. Having one maxed card at 95% drags you down even if other cards are at 0%.
3. Length of credit history — 15%
Average age of all your accounts + age of your oldest account. The older, the better.
What helps: Keeping old accounts open (even if rarely used), avoiding new accounts when you don’t need them.
What hurts: Closing old credit cards (drops your oldest account age), opening multiple new accounts in a short time.
4. Credit mix — 10%
Variety of account types: credit cards, installment loans (auto, personal, mortgage), retail accounts. A mix is better than all one type.
Actionable for most people: If you have only credit cards, a credit-builder loan adds installment history.
Not worth chasing: Don’t take out a loan you don’t need just to diversify. The factor is only 10%.
5. New credit — 10%
Recent hard inquiries and newly opened accounts. Each hard inquiry drops your score 2-5 points for about a year; the effect fades over 24 months.
What counts as a hard inquiry: Any credit application that pulled your report (credit card, auto loan, mortgage, etc.). Soft inquiries (employer checks, your own score checks, pre-qualification offers) do NOT count.
The different FICO versions
FICO Score 8 — the most widely used version. Released in 2009. Still the version used by most credit card issuers and most auto lenders.
FICO Score 9 — released 2014. Treats paid medical collections more favorably; treats unpaid medical collections less harshly than FICO 8.
FICO Score 10 / 10T — released 2020. “10T” includes trended data (how your balances have moved over time, not just today’s snapshot). Rolling out slowly in lending.
FICO Score 2, 4, 5 — older versions still used by mortgage lenders (yes, mortgage underwriting uses models from 2004). Known as “FICO mortgage scores.”
FICO Auto Score 8 / 9 — specialized auto-lending version. Weighs auto loan history more heavily.
FICO Bankcard Score 8 — specialized credit-card-lending version. Weighs credit card history more heavily.
Why this matters: A 730 on Credit Karma (VantageScore 3.0) might be a 720 on FICO 8 when you apply for a credit card, a 695 on FICO Mortgage when you apply for a home loan, and a 740 on FICO Auto Score when you apply for a car loan. All the same day. All legitimate. The model used depends on the lender and the product.
How to read your score
Below 580 — poor. Most credit cards require a secured option or no-credit-check alternative.
580-669 — fair. Qualifies for subprime credit with meaningful fees and interest.
670-739 — good. Qualifies for most standard credit products at reasonable rates.
740-799 — very good. Best rates for credit cards, auto loans, competitive mortgage rates.
800+ — excellent. Best available rates on everything.
Diminishing returns above 760. Going from 760 to 800 is a lot of work for very little interest-rate difference. Most lenders put you in the same rate bucket above 760. Don’t chase the last 40 points unless you’re buying a house.
Common myths worth dismantling
- “Checking my own credit hurts my score.” No. Self-checks are soft inquiries and don’t affect your score. Check monthly.
- “Carrying a balance helps build credit.” No. Paying off the full balance every month builds credit equally well. Carrying a balance just pays interest for no score benefit.
- “Paying off old collections boosts my score.” Mixed. On FICO 8, a paid collection scores the same as unpaid until it ages off (7 years). On FICO 9 and VantageScore 4.0, paid collections are weighted less. Depends on the scoring model and the type of debt.
- “You need to go into debt to build credit.” No. Make one small charge per month, pay in full, never pay interest. That builds credit just as effectively as carrying debt.
- “Closing a credit card improves your score.” Usually no. Closing reduces your available credit (raises utilization) and can drop your average account age.
FAQ
Q: What’s the difference between FICO 8 and FICO 9?
A: FICO 9 is newer (2014) and treats paid medical collections more favorably. It’s adopted slowly by lenders — most still use FICO 8 for credit cards and auto loans.
Q: Why is my FICO different from my Credit Karma score?
A: Credit Karma shows your VantageScore 3.0, which is a different scoring model from FICO. They can differ by 20-60 points. Both are legitimate; different lenders use different models.
Q: How is a FICO score calculated?
A: Using five weighted factors: payment history (35%), utilization (30%), length of history (15%), credit mix (10%), new credit (10%). The exact formula is proprietary, but these weights are publicly disclosed by FICO.
Q: Can I have three different FICO scores?
A: Yes. Your FICO differs by bureau (Experian vs Equifax vs TransUnion) because each bureau has slightly different data, AND by version (FICO 8 vs FICO 9 vs Auto Score vs Bankcard Score). You technically have dozens of FICO scores.
Q: What’s a “mortgage FICO” and why is it lower?
A: Mortgage FICO refers to FICO Score 2, 4, and 5 — older FICO models that mortgage lenders use for regulatory reasons. They tend to run 10-40 points lower than FICO 8 because they weight negative items more heavily.
Next steps
- Download the free 30-Day Credit Score Boost Checklist — focused on the two factors that drive 65% of your score
- Read next: How to Boost Your Credit Score in 30 Days · Statement Date vs Due Date
Written by Flo, credit educator and creator of Credit-to-Capital Blueprint. Last updated: 2026-04-20.