The Complete Guide to Your FICO® Score
Updated
If you're on a Galaxy Fold, consider unfolding your phone or viewing it in full screen to best optimize your experience.
Your FICO® Score is a number that decides your financial fate in many ways. While a high FICO® Score opens a lot of doors, a low FICO® Score can make life more difficult for you. You could have a harder time securing credit and encounter higher interest rates when you do. A low score can also result in having to pay security deposits for utilities and could even make it difficult to rent an apartment.
The bottom line is, it's important and it's something almost everyone has to deal with at some point in their lives. If you've ever had a loan or a credit card, you probably have a FICO® Score, and if you ever intend to use credit in the future, you need to understand what your score is and how it looks to lenders. Here's a guide to everything you need to know about those three all-important numbers.
A FICO® Score is a three-digit number that lenders use to assess your creditworthiness when deciding whether to work with you. You can think of it like a financial report card, but instead of determining whether you pass or fail a class, this report card determines whether you're approved for loans or lines of credit and what interest rate you will get.
The score is based on the financial information that appears in your credit reports, which includes:
The FICO formula (discussed below) evaluates all of the information in your credit report and translates this into a three-digit number ranging from 300 to 850, with a higher number indicating a better score.
It was invented back in 1989 by Fair Isaac Corporation, now known only as FICO, as a way to help lenders make decisions about borrowers more easily, without having to interpret the complexities of their credit reports. It was the first credit scoring model to arrive on the scene and it's still the most widely used today. Over 90% of lenders use it to assess risk, according to FICO's data.
Make sure you're getting the best account for you by comparing savings rates and promotions. Here are some of our favorite high-yield savings accounts to consider.
| Account | APY | Promotion | Next Steps |
|---|---|---|---|
Open Account for SoFi Checking and Savings
On SoFi's Secure Website.
Rating image, 4.50 out of 5 stars.
4.50/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair = Poor |
up to 3.80%²
Rate info
You can earn the maximum APY by having Direct Deposit (no minimum amount required) or by making $5,000 or more in Qualifying Deposits every 30 days. See SoFi Checking and Savings rate sheet at: https://www.sofi.com/legal/banking-rate-sheet.
Min. to earn: $0
|
New customers can earn up to a $300 bonus with qualifying direct deposits!¹
|
Open Account for SoFi Checking and Savings
On SoFi's Secure Website. |
Open Account for CIT Platinum Savings
On CIT's Secure Website.
Rating image, 4.50 out of 5 stars.
4.50/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair = Poor |
4.10% APY for balances of $5,000 or more
Rate info
4.10% APY for balances of $5,000 or more; otherwise, 0.25% APY
Min. to earn: $100 to open account, $5,000+ for max APY
|
Earn a bonus of at least $225 after a one-time deposit of $25,000+.
Transfer a one-time deposit of $25,000-$49,999.99 for a bonus of $225. Transfer a one-time deposit of $50,000+ for a bonus of $300. Account must be opened with code PS2025 while this promotion lasts, and funded within 30 days. Bonus will be fulfilled within 60 days from the funding date. There is no period of time where the customer will be required to maintain the funds. Account must be open when bonus is credited. One bonus per account and primary customer. Bonus will be credited into the Platinum Savings Account that fulfills the funding requirement. Funding can be deposited all at once or incrementally.
|
Open Account for CIT Platinum Savings
On CIT's Secure Website. |
Open Account for American Express® High Yield Savings
On American Express's Secure Website.
Rating image, 4.00 out of 5 stars.
4.00/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair = Poor |
3.70%
Rate info
3.70% annual percentage yield as of April 11, 2025. Terms apply.
Min. to earn: $0
|
N/A
|
Open Account for American Express® High Yield Savings
On American Express's Secure Website. |
SoFi disclosure:
¹ New and existing Checking and Savings members who have not previously enrolled in Direct Deposit with SoFi are eligible to earn a cash bonus of either $50 (with at least $1,000 total Direct Deposits received during the Direct Deposit Bonus Period) OR $300 (with at least $5,000 total Direct Deposits received during the Direct Deposit Bonus Period). Cash bonus will be based on the total amount of Direct Deposit. Direct Deposit Promotion begins on 12/7/2023 and will be available through 1/31/26. See full bonus and annual percentage yield (APY) terms at sofi.com/banking#1.
² SoFi members who enroll in SoFi Plus with Direct Deposit or by paying the SoFi Plus Subscription Fee every 30 days or with $5,000 or more in Qualifying Deposits during the 30-Day Evaluation Period can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. Members without either SoFi Plus or Qualifying Deposits, during the 30-Day Evaluation Period will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Only SoFi Plus members are eligible for other SoFi Plus benefits. Interest rates are variable and subject to change at any time. These rates are current as of 1/24/25. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet. See the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.
³ We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Checking & Savings Fee Sheet for details at sofi.com/legal/banking-fees/.
⁴ SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per depositor per legal category of account ownership, as described in the FDIC’s regulations.
Any additional FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $3M through participation in the program. See full terms at SoFi.com/banking/fdic/sidpterms. See list of participating banks at SoFi.com/banking/fdic/participatingbanks.
⁵ We’ve partnered with Allpoint to provide you with ATM access at any of the 55,000+ ATMs within the Allpoint network. You will not be charged a fee when using an in-network ATM, however, third-party fees incurred when using out-of-network ATMs are not subject to reimbursement. SoFi’s ATM policies are subject to change at our discretion at any time.
⁶ Early access to direct deposit funds is based on the timing in which we receive notice of impending payment from the Federal Reserve, which is typically up to two days before the scheduled payment date, but may vary.
⁷ Overdraft Coverage is limited to $50 on debit card purchases only and is an account benefit available to customers with direct deposits of $1,000 or more during the current 30-day Evaluation Period as determined by SoFi Bank, N.A. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the“30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Members with a prior history of non-repayment of negative balances are ineligible for Overdraft Coverage.
The FICO® Score has gone through several iterations since its introduction as the company continues to update its formula to better predict risk. The FICO® Score 10, which is the latest FICO® Score, and the FICO® Score 8 -- the most widely used score -- both weigh the following five factors:
Your payment history is the single most important factor in your FICO® Score calculation, making up 35% of your score. It receives this honor because it shows how you've managed your money in the past. Past behavior tends to be an accurate predictor of how likely you are to pay back the money you've borrowed as agreed.
This portion of your FICO® Score looks at your payment history on your credit cards, including retail store cards, as well as mortgages and other types of installment loans, and other types of financial company accounts. Negative information, like bankruptcies and accounts in collection, also affect the payment history portion of your FICO® Score. If you have late payments on your record, the FICO model considers how late they were, how recent they were, how many of them you have across different accounts, and how much you owed.
A single late payment may not seem like a big deal, but it can drop an excellent credit score by 100 points or more, according to FICO data, so paying on time is the best thing you can do if you're trying to raise your FICO® Score or keep it high.
This category looks at how much you owe on your current credit accounts and is almost as important as payment history, accounting for 30% of your FICO® Score. For installment debt -- loans with predictable monthly payments -- the FICO scoring model looks at how much you owe and how that compares to the initial amount you borrowed.
For revolving debt, like credit cards, where the amount you owe changes from month to month, FICO looks at your credit utilization ratio. This is the ratio between the amount of credit you use each month and the amount you have available to you. So if you have a $10,000 limit on one card and your balance is $5,000, your credit utilization ratio would be 50%. Ideally, you want to keep this number below 30% and preferably as low as you can, as long as that amount is above zero.
Amounts owed is considered an important measure of your financial responsibility because a heavy reliance on credit indicates someone who's living beyond their means. Adding another loan or credit card to that mix could make it impossible for the borrower to keep up with their monthly payments.
The third factor in your FICO® Score -- length of credit history -- is pretty straightforward and makes up 15% of your score. It gives lenders a more comprehensive view of how well you use credit, so a longer credit history typically translates to a higher score, assuming you've always paid on time and kept your credit utilization low. This category looks at the age of your oldest and newest credit accounts and the average age of your credit accounts, plus the length of time since each account has been used.
Closing an old credit card you no longer use may seem like a wise decision, but if it's the oldest credit account you have, doing so will bring down your average credit age and your credit score could actually take a hit. Unless it has an annual fee you don't want to pay anymore, you're probably better off keeping it in your wallet and using it for an occasional purchase.
Credit mix accounts for 10% of your FICO® Score, and it measures the different types of credit accounts you have. You'll have a better score if you have some revolving debt, like credit cards, and some installment debt, like a home, car, or personal loans, on your credit reports. Lenders like to see that you can responsibly manage both types of debt. Even if you have loans that are now paid off, they still count toward your credit mix.
The final category is new credit, at 10% of your FICO® Score. Research has shown that applying for a lot of new credit accounts in a short time span indicates greater risk, so you don't want to apply for a bunch of credit cards and loans within a single year. This category looks at the number of new accounts you have and the number of credit inquiries on your report.
Every time you apply for a loan or line of credit, your lender will do a hard inquiry, also known as a hard credit check, on your report which will lower your score by a few points. The FICO model takes into account normal comparison shopping behavior when applying for new credit, so it counts all credit inquiries that take place within 30 days as a single inquiry. If you are in the market for a new credit card or loan, get all your applications within one month to reduce the effect on your credit score.
There's a common misconception that checking your own credit also lowers your credit score. When you check your own credit score, it's considered a soft inquiry and it has no effect on your credit score whatsoever.
There aren't any hard and fast rules about what constitutes a good FICO® Score. Each lender will have its own definition of an acceptable score, but FICO itself defines the credit score ranges as follows:
| Rating | FICO® Score Ranges |
|---|---|
| Exceptional | 800-850 |
| Very good | 740-799 |
| Good | 670-739 |
| Fair | 580-669 |
| Poor | 300-579 |
If you're on the edge between poor and fair credit or fair and good credit, you should take steps to improve your credit. This will increase your odds of securing new credit or a good interest rate. Be aware that lenders typically don't disclose the minimum FICO® Score necessary in order to be approved. They may weigh other factors besides your credit score when considering your application.
Your debt-to-income ratio is the ratio between your monthly debt payments and your monthly income and it's often taken into account when you apply for new loans. If you have a FICO® Score of 650 but your debt-to-income ratio is good -- that is, your monthly debt obligations don't eat up a large portion of your monthly income -- a lender may still be willing to work with you, whereas a high debt-to-income ratio in combination with a 650 FICO score might get your application denied.
Your FICO® Scores are based on your credit reports. Most people have three of these -- one for each of the major credit bureaus: Equifax, Experian, and TransUnion. That means that everyone also has three FICO scores. These scores are likely similar but may not be exactly the same because some lenders may not report your account details or payment history to all three credit bureaus. Lenders may look at one or more of your FICO® Scores before deciding whether to work with you, but there's no way for you to know which one was used, so you must keep all of them high.
To make things a little more complicated, FICO also offers industry-specific scores targeted toward auto lending, mortgage lending, and credit cards. These scores look at the same information as the regular FICO® Score but weigh them slightly differently to better measure risk in these specific industries.
Some credit cards offer free FICO® Scores as a perk to cardholders, and a few credit unions and online banks do this as well. If you're interested in a free credit score, start by checking if any of your existing credit cards or your bank offer this service, and if not consider signing up for one that does.
Don't be fooled into thinking every free credit score is a FICO® Score, though. Many financial companies have created their own credit scoring models that weigh your credit history differently and may have an entirely different scoring system. These can give you a false sense of where your credit score actually stands because these scores aren't the same ones that the majority of lenders see. If a company offers you a free credit score and doesn't specify that it's a FICO® Score, it isn't, and it's probably not all that useful to you.
The free FICO® Scores you get through your credit card or bank may only be for a single credit bureau, so if you want to see your FICO scores for each of your credit reports or you want to see some of your industry-specific FICO scores, you'll have to pay to purchase them from FICO itself. It offers credit scores and reports for each bureau with or without credit monitoring.
Raising your FICO® Score isn't difficult once you understand the factors that influence your score, but it does take time. Your FICO® Scores are designed to provide a long-term view of how you've managed your money, so it takes months or even years to make a significant difference to your credit score. Over time, you can improve your score by following these tips.
Paying on time is the most important thing you can do to raise your FICO® Score or keep your credit score high. Set reminders for yourself or enroll in automatic payments if you struggle to remember to pay on time. You may also have to rework your budget if you're missing payments because you don't have enough money to cover all your obligations. Consider slashing your discretionary spending and working a little extra to increase your income.
If you're having a hard time finding a lender willing to help you build or rebuild poor credit, consider getting a secured credit card. These cards require a security deposit equal to your monthly credit limit, which is usually a few hundred dollars. They're available to people with poor credit and they report your monthly payments to the credit bureaus, which can help you raise your FICO score over time. Young adults interested in establishing a credit history should also consider student credit cards.
Try to keep your credit utilization low if you can. When that's not possible, pay your credit card bill every two weeks instead. The credit bureaus only see your final balance each month, so making a payment mid-month can help you spend more without raising your credit utilization ratio.
Don't be afraid to apply for new credit as needed, but do so sparingly and always complete your applications as close together as possible. Always read the fine print before you apply for a loan or credit card so you understand any fees or other expenses associated with the borrowed money. This will help you avoid surprises that could jeopardize your ability to pay on time.
Beyond all that, improving your FICO® Score comes down to time and consistency. Keep those good behaviors going and over time, you'll see your FICO® Score continue to rise.
Don't you wish you could take a peek inside a credit card expert's wallet sometimes? Just to see the cards they carry? Well, you can't look in anybody's wallet, but you can check out our experts' favorite credit cards. Get started here:
A FICO® Score is the most commonly used type of credit score, though other types of credit scores, like VantageScore, exist. No matter which scoring model is used, the same basic factors are considered, such as your payment history and credit usage.
Yes. Your FICO® Scores are based on your credit reports and most people have three of these -- one for each of the major credit bureaus: Equifax, Experian, and TransUnion. If you have a credit report with each bureau, you'll have three FICO® Scores.
Yes, start by checking if any of your existing credit cards or your bank offer your score for free.
If you've had a credit card or a loan in the past, you probably have a credit report with the three major bureaus. However, you might not have a credit score if you've had no account activity within the past 24 months. If it's been fewer than six months since you got your first credit card or loan, your credit history may be too new for FICO to calculate your scores.
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Motley Fool Money does not cover all offers on the market. Motley Fool Money is 100% owned and operated by The Motley Fool. Our knowledgeable team of personal finance editors and analysts are employed by The Motley Fool and held to the same set of publishing standards and editorial integrity while maintaining professional separation from the analysts and editors on other Motley Fool brands. Terms may apply to offers listed on this page.
