FICO SCORE Definition & Meaning

FICO Score

Or FI·CO score

[fahy-koh skawr]

Phonetic (Standard)IPA

noun

Trademark,

a type of credit score used by most banks and credit card issuers to assess an individual’s creditworthiness: FICO Scores range from a low of 300 to a high of 850, with 700 or higher generally considered a good credit score.

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51�Թ� History and Origins

Origin of FICO Score¹

First recorded in 1989; from FICO, a data analytics company originally named Fair, Isaac and Company

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Example Sentences

Examples have not been reviewed.

They generate a “FICO” score for borrowers, on a scale of 300 to 850, based on income, savings, assets, loans and history of debt repayment.

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People buying homes won’t see a change to their chances of being approved for a mortgage since most mortgage lenders rely on the FICO score, Richardson says.

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It requires borrowers to have a minimum FICO score of 560, but after they pass that hurdle the score isn’t given any weight in the company’s credit models.

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In addition to helping you secure more favorable home and auto loans, a healthy FICO® score can make everything from renting an apartment to opening a credit card all that much easier.

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Yet these errors can have lasting effects, like lowering your FICO® score and preventing you from nabbing a favorable interest rate when buying a home.

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When To Use

What does FICO Score mean in credit management?

A FICO Score is a type of credit score originally devised by Fair, Isaac and Company, recently simply renamed FICO. (Fair and Isaac were the surnames of the company’s founders.) FICO Scores are used by most banks and credit card issuers to assess a person’s creditworthiness.Scores range from a low of 300 to a high of 850, and are calculated taking into account the individual’s financial history, including the timeliness of payments of credit cards, loans, and consumer bills, and any defaults on outstanding debts. Improvements in any of these areas can raise a FICO Score, while any deteriorations can lower a score.Many financial institutions follow strict criteria for granting credit and may not extend credit to a person with a FICO Score falling below a range of 600–650 (the exact cut-off point depending on the particular institution). A FICO Score of 700 or higher is generally considered a good credit score, which can help a potential borrower obtain a loan or a credit card.Want to learn even more about FICO scores? Check out our article “What Does ‘FICO’ Stand For”?

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