FICO Credit Scores

Creditors and lenders often refer to an individual's FICO┬« score when evaluating their risk of non-payment.  These numerical values are oftentimes the way companies decide if they need a deposit before providing service.  They're also used by lending institutions to determine the interest rate charged on a loan.

What is a FICO Score?

A FICO score is nothing more than a reference to the Fair Isaac credit scoring model.  Variations of this model are published by each of the three major credit bureaus.  The FICO model calculates credit scores using information along five dimensions, which appear below along with their weights:

  • Payment History (35%):  account payment information from partners such as credit card companies, lenders of installment loans, mortgages, and retailers.  This part of the score measures the ability to pay on time, and the money past due.
  • Amounts Owed (30%):  information concerning the total amount of credit outstanding, number of accounts, balances on account, and how much credit is outstanding relative to the maximum amount creditors are willing to extend.
  • Length of Credit History (15%):  measures how long accounts have been open with creditors and lenders.  Longer credit histories make it easier to accurately identify payment patterns.
  • New Credit (10%):  the frequency and recency of new credit applications.
  • Types of Credit (10%):  the diversity of credit in an individual's portfolio.  For example, does the individual have a mortgage, car loan, and credit cards?  The greater the mix of credit, the more accurate the score.


Individuals seeking a FICO score calculator are going to be disappointed to learn that it's not possible to find one that provides a numerical value.  Fair Isaac uses a complex and proprietary algorithm, or calculation, to develop their score.

We have as many credit calculators as any website, but you won't find a FICO calculator here for that very reason.  Anyone claiming to have such a tool is misleading the public.

Free Scores

For the same reasons that calculators will not be found, it's not possible to find free FICO scores online either.  Once again, anyone claiming to offer this service is misleading the public.  Legitimate offers should cost around $15, and that is for just one of the three credit reporting agencies.

A bundle of credit scores from all three agencies (Experian, TransUnion, and Equifax) will cost around $45, while the ability to monitor a score will cost nearly $20 per month.  This is arguably a good value, but not exactly free.

Distribution of Scores

Figuring out if a score is good, bad, or average, is not as simple as it sounds.  For argument's sake, it's possible to define a good score as anything above the national average.  Right now (October 2014), the national average credit score is around 640.

VantageScore is now used by all three credit bureaus and is starting to emerge as a competitor to FICO.  The national average VantageScore is 736 as of October 2014.  However, the VantageScore scale is 501 to 990, which is considerably higher than FICO's range of 300 to 850.   Additional information on this topic can be found in our article: National Average Credit Scores.

Unfortunately, an average can sometimes be misleading because it doesn't reveal anything about the "distribution" of scores; the table below provides this information.

FICO Score Distribution

of Population Credit Score
2% 300 - 499
5% 500 - 549
8% 550 - 599
12% 600 - 649
15% 650 - 699
18% 700 - 749
27% 750 - 799
13% 800 - 850


What this table provides is the percentage of the national population with credit scores in the ranges indicated.  From this table we know that 27% of the population has a credit score between 750 and 799.   We also know that 58% (13% + 27% +18%) of the population has a credit score above 700.

Increasing Scores

Below is a short list of steps anyone can take to improve their FICO score:

  • Make payments to creditors on time, and pay the full amount owed.
  • Don't max-out lines of credit.  Just because a company extends $5,000 in credit, doesn't mean it's a good idea to use the entire amount offered.
  • Don't be afraid to open new accounts, especially if someone is just entering the workforce.   For example, college students shouldn't be afraid to open credit card accounts because the sooner they're opened, the more credit history they've generated.
  • Don't apply for too many cards at the same time.  A score will suffer if it looks like someone is scrambling to get credit from everyone in a short timeframe.
  • Diversify credit by owning car loans, mortgages, and credit cards.  The more information a creditor has on an account, the more accurate the score.

Repair Services

While it is possible to raise the score appearing on a credit report over time, there are very few actions anyone can take to repair a score in the short term.  No doubt there are many organizations offering credit repair services, but there are legal limits as to what they can actually do to fix a report.

If a credit repair offer sounds too good to be true, then it probably is too good to be true.   Anyone that's been denied credit recently is entitled to a free copy of their credit report.  One of the most important actions someone can take to repair their credit score is to make sure there are no errors appearing on the report.

Finally, if errors are found on a report, our article on the Fair Credit Reporting Act contains the exact steps anyone can take to correct their report, as well as the contact information for each of the three credit reporting agencies.

About the Author - FICO Credit Scores (Last Reviewed on June 30, 2016)