Are FICO Scores and Credit Scores the Same Thing?

If you’ve ever applied for a credit card or a loan, you know that your credit score matters. However, you may have noticed that while some lenders talk about checking your credit score, others say they’ll look at your FICO score.

You might wonder to yourself, “Is ‘FICO score’ and ‘credit score’ the same thing?” Here’s what you need to know.

Is “FICO score” and “credit score” the same?

Credit bureaus gather financial data for millions of people. They compile that data into credit reports. Then, this data is used to calculate a number that represents your financial history, which is called a “credit score.” 

A FICO score is a specific type of credit score. It may help to think of it this way:

• All FICO scores are credit scores
• Not all credit scores are FICO scores

“FICO” stands for “Fair Isaac Corporation,” a data analytics company that created one of the first consumer credit scores. Today, about 90% of top lenders use FICO scores when evaluating applications for credit.

When most people use the term “credit score,” they’re referring to either a FICO score or a VantageScore. VantageScore is an alternative credit-scoring model created by the three major credit bureaus: Equifax, Experian, and TransUnion. Lenders are much more likely to use FICO than VantageScore when making lending decisions.

Understanding FICO scores

The three major credit bureaus gather information about your past and current credit accounts. Then, the following weighted percentages are applied to this information to calculate your credit score:

• Payment History: 35%
• Credit Utilization: 30%
• Length of Credit History: 15%
• Credit Mix: 10%
• Amount of New Credit: 10%

If you’ve ever checked your FICO score online, you may have noticed multiple numbers. That’s because each of the major credit bureaus has a different way of calculating the score.

FICO scores range from a low of 300 to a high of 850. Here’s how many lenders categorize FICO scores:

• Exceptional: 800–850
• Very Good: 740–799
• Good: 670–739
• Fair: 580–669
• Poor: 300–579

The higher your score is, the more likely you are to qualify for low interest rates and other favorable terms. Many lenders will deny your application if your credit is poor.

If you’re trying to improve your FICO score, establishing a positive payment history is the most important step you can take. Kikoff makes building that history simple, even if you have bad credit, little credit, or no credit at all.

We don’t check your credit when you apply. Once you’re approved, you’ll get a small credit line that you can use to make purchases in the Kikoff store. You pay off those purchases over time, and we report your payments to the three credit bureaus.

That’s not the only credit-building tool we offer. We also assist members with debt negotiation, rent reporting, credit-builder loans, and more.

Understanding VantageScore

VantageScore is a credit scoring model designed to be more inclusive than FICO. It takes into account a wider variety of payment types, like rent, cell phone payments, and utilities. This means that it can calculate credit scores for people who might not have FICO scores.

Notably, you may have a VantageScore as soon as one month after opening a qualifying account. FICO requires you to have six months of credit history first.

The VantageScore model uses slightly different weighted factors than FICO:

• Payment History: 41%
• Depth of Credit: 21%
• Credit Utilization: 20%
• Balances: 11%
• Recent Credit: 5%
• Available Credit: 3%

Like FICO scores, VantageScore results can be divided into categories. But these categories are slightly different:

• Excellent: 780–850
• Good: 661–780
• Fair: 601–660
• Poor/Very Poor: 300–600

Many websites that offer free credit monitoring show you your VantageScore. Keep in mind that most major lenders rely on FICO scores, and there can be significant differences between the two scoring models.

Conclusion

When you invest time and effort into building your credit score, you might find yourself opening doors that you never thought possible. But what if you’re not sure how to start your credit-building journey?

That’s why Kikoff is here. We offer an array of credit-building tools you can access right from your smartphone, and we make it easy to track your progress. If you’re ready to get started, sign up in minutes today!