What is a FICO® score (and why does it matter)?

What is a FICO® score (and why does it matter)?


Your FICO credit score is calculated using a specific scoring model that is used by over 90% of lenders. FICO scores are calculated by three different credit reporting agencies: Equifax, TransUnion, and Experian.

Each credit bureau calculates your FICO credit score a little differently, and each bureau may have slightly different information. Because of this, each bureau will typically report a slightly different score.

For mortgage lending purposes, lenders will disregard the highest score and disregard the lowest score, using the score that is in the middle as your official credit score. So, if you have a 620, 636, and a 633, your credit score would be a 633.

What is in a FICO Score?

FICO credit scores are based on five elements.

  1. Payment History – whether or not you’ve made your payments on-time.
  2. Credit Utilization – the amount of credit you have available to you but aren’t using.
  3. Length of Credit History – how long each account has been open and the length of time since you’ve used the account.
  4. New Credit – whether you’ve recently opened new lines of credit.
  5. Credit Mix – which types of accounts make up your credit profile.

Free Credit Scores

There are many online sites that offer free credit scores. Credit Karma, Credit Sesame, even some of the actual credit bureaus offer free credit scores.

It’s important to check the fine print though. Most of these free services DO NOT provide you with a FICO score. There are different scoring models that are used to produce these free scores.

Often times this score can be significantly higher than your FICO credit score. While these services are great for monitoring the contents of your credit report, they will not help you determine if you meet the minimum score requirements for various loan programs.


Ready to find out what loan programs you qualify for? Apply online or give us a call at 877-892-8222. You don’t need perfect credit to purchase a home. If you don’t get pre-approved today, we’ll let you know exactly what you need to do to get pre-approved in the future!

Originally published April 18, 2019, updated June 23,2020