FICO Credit Score

What is a Good FICO Score?

A Fair Isaac Corporation (FICO) Credit Score is a three-digit number that summarizes the positive and negative information on your credit report. FICO Credit Scores are the most common credit scores used by lenders to quickly assess your risk, and it can influence everything from car loans to mortgages to credit cards approval and limits. Good credit habits like always paying bills on time, managing your credit by keeping balances low and only opening new credit cards when you need them can all have positive effect on your financial health, and in turn on your FICO Credit Score.

How is my FICO Score calculated?

Lenders use your score as a gauge for risk. The higher the score, the lower the risk. Your FICO score only includes information from your credit report. It is composed of 5 main categories:FICO Score

  • Payment History: late or missing payments, collections, public records, and making payments on time.
  • Amount Owed: how much you owe to creditors and the percentage of available credit you are using.
  • Length of Credit History: how long your accounts have been established, open, and any accounts recently opened.
  • New Credit: looks at the number of new accounts and the number and timing of requests for credit inquiries, among other things.
  • Types of Credit Used: types of credit accounts including revolving credit and installment accounts like fixed loan amounts.

The 3 major national consumer reporting agencies are:

  1. Transunion
  2. Experian
  3. Equifax

What FICO Means

What your FICO Credit Score means to lenders:

  • Exceptional (800-850): Indication of an exceptional borrower;
  • Very Dependable (740-799): Indication of a very dependable borrower;
  • Good (670-739): Scored in this average U.S. range are considered good;
  • Below Average (580-669): Some lenders will approve borrowers with this score;
  • Very Risky (300-579): Indication of a very risky borrower.

How to improve your credit score?

  • Always pay your bills on time;
  • Keep balances on revolving credit low: typically under 5-7%;
  • Pay down debt; don’t move it around;
  • Don’t close unused cards as a short-term strategy;
  • Don’t open new cards just to increase your available credit. This will backfire!
  • In order to increase the length of credit history, you need to start early;
  • Shop for rates within a focused period of time (30 days);
  • Only apply for new credit as needed! Keep the number of inquiries low;
  • Closed accounts will still show up on your report for some time.

Use the free Credit Karma app keep track of your credit score weekly. The will also allow you to check your report from each agency once a year for free, as required by the federal law under the Fair Credit Reporting Act.

Raising your score is like getting into shape. It takes time and there is no quick fix!

Feel free to check other ways to improve your financial education here.

What do you think? What lessons did you learn from utilizing your credit cards? How do you keep you credit score high? Comment below!


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  1. julie ellis April 19, 2018 at 11:37 am - Reply

    Very valuable info here. Thank you for sharing!

  2. Christina Gould May 18, 2018 at 12:06 am - Reply

    I’ve been trying to get my score up forever. Thanks for posting!

  3. MD Kennedy June 23, 2018 at 3:00 pm - Reply

    So many people don’t know their credit score until it is too late – like when they need to borrow money! And because mistakes do happen you have to keep your eye on it.

  4. MD Kennedy July 13, 2018 at 8:05 am - Reply

    It is surprising that so many of my peers in executive financial management are clueless as to their FICO score! EVERYONE needs to know where they stand, even if they don’t foresee any loan needs. You want to catch an errors or fraud in your file before you may need it!

  5. Calvin September 2, 2018 at 12:29 pm - Reply

    Interesting good to know. I know my credit score

  6. Kelly October 31, 2018 at 3:36 am - Reply

    Must-have information that everyone should know about.

  7. Diane November 24, 2018 at 12:44 am - Reply

    A perk behind the curtain of credit scores

  8. Will Dare December 23, 2018 at 10:43 am - Reply

    I really did enjoy reading this article, as always, well done! That Fico Score calculation is very well understandable. Thanks.

  9. Will Dare December 24, 2018 at 7:06 pm - Reply

    I did enjoy it. Really, a lot! Good article.

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