"For years, there has been a lot of confusion among consumers over which credit scores matter. While there are many types of credit scores, FICO Scores matter the most because the majority of lenders use these scores to decide whether to approve loan applicants and at what interest rates."
FICO is the go-to for mortgage lenders
FICO says it is used by 90% of “top lenders,” and it's favored by the law in one crucial spot: home mortgages. Right now, it's the only tool to evaluate credit risk that is approved for use by government-sponsored enterprises such as Fannie Mae and Freddie Mac.
However, this does not influence our evaluations. The primary credit scoring models are FICO® and VantageScore®, and both are equally accurate. Although both are accurate, most lenders are looking at your FICO score when you apply for a loan.
The reason for the differences in FICO scores comes down to the differences in credit reports from each of the three major credit bureaus. For example, lenders might not report credit activity to all bureaus.
Why is my FICO® score different from my credit score? Your FICO Score is a credit score. But if your FICO score is different from another of your credit scores, it may be that the score you're viewing was calculated using one of the other scoring models that exist.
Your Credit Karma score should be the same or close to your FICO score, which is what any prospective lender will probably check. The range of your credit score (such as "good" or "very good") is more important than the precise number, which will vary by source and edge up or down often.
To reach an 800 credit score, you'll want to demonstrate on-time bill payments, have a healthy mix of credit (meaning accounts other than just credit cards), use a small percentage of your available credit, and limit new credit inquiries.
Simply put, there is no “more accurate” score when it comes down to receiving your score from the major credit bureaus.
The FICO credit-scoring model has been updated over the years, resulting in multiple versions of the score. FICO Score 8 is the most commonly used. But the version may vary by lender and credit product, like applying for a credit card versus financing a car.
Key Takeaways. A credit score is a three-digit number that measures your financial health and how well you manage credit and debt. FICO scores are a specific type of score that lenders can use when making borrowing decisions. The FICO credit scoring system is the most widely used credit score.
"For years, there has been a lot of confusion among consumers over which credit scores matter. While there are many types of credit scores, FICO Scores matter the most because the majority of lenders use these scores to decide whether to approve loan applicants and at what interest rates."
How many Americans have an 850 credit score? Only 1.31% of Americans with a FICO® Score have a perfect 850 credit score. While a score this high is rare among any demographic, older generations are more likely to have perfect credit. Baby boomers make up a whopping 59.4% of the people with an 850 credit score.
A 620 credit score is typically what you'll need to get a mortgage for a home purchase. Although you can buy a house with a credit score as low as 500, you'll pay a higher rate and make a larger down payment.
Only about 1.6% of the 232 million U.S. consumers with a credit score have a perfect 850, according to FICO's most recent statistics.
FICO 8 scores range between 300 and 850. A FICO score of at least 700 is considered a good score. There are also industry-specific versions of credit scores that businesses use. For example, the FICO Bankcard Score 8 is the most widely used score when you apply for a new credit card or a credit-limit increase.
The main disadvantage of Experian is that, unlike FICO, it is rarely used as a stand-alone tool to make credit decisions. Even lenders that review credit reports in detail rather than go off a borrower's numerical score often look at results from all three bureaus, not just Experian.
While older models of credit scores used to go as high as 900, you can no longer achieve a 900 credit score. The highest score you can receive today is 850. Anything above 800 is considered an excellent credit score.
Generally speaking, a good credit score is between 690 and 719 in the commonly used 300-850 credit score range. Scores 720 and above are considered excellent, while scores 630 to 689 are considered fair. Scores below 630 fall into the bad credit range.
The two big credit scoring models used by auto lenders are FICO® Auto Score and Vantage.
An 800 credit score is not as rare as most people think, considering that roughly 23% of adults have a credit score in the 800-850 range, according to data from FICO. A score in this range allows consumers to access the best credit card offers and loans with the most favorable terms.
This is mainly because of two reasons: For one, lenders may pull your credit from different credit bureaus, whether it is Experian, Equifax or TransUnion. Your score can then differ based on what bureau your credit report is pulled from since they don't all receive the same information about your credit accounts.
You've probably heard of Credit Karma – even the name sounds nice, doesn't it? But, despite that, you'd be surprised how many borrowers are shocked that their Credit Karma score is lower than the FICO scores their lender uses. Read on to find out why.