What is a Credit Score? FICO Ranges, Factors, and How to Improve Yours

A credit score is a three-digit number, typically ranging from 300 to 850, that lenders use to assess how likely you are to repay borrowed money. The two main scoring models are FICO and VantageScore. Both models look at the same kinds of information from your credit reports, including your payment history, how much of your available credit you're using, how long you've had credit, what types of credit you use, and how often you apply for new credit.

Your credit score follows you when making most major financial decisions. Lenders use it when you apply for a credit card, an auto loan, or even a mortgage. Landlords look at it before renting you an apartment, and insurance companies use it in many states to set your rates. The higher your score, the more likely you are to be approved, and the better the terms you're offered.

In this guide, we'll walk through how credit scores are calculated, what counts as a good score, the difference between FICO and VantageScore, and concrete steps you can take to improve yours.

Credit reports vs. credit scores

Credit reports and credit scores get used interchangeably in conversation, but they're not the same thing. Your credit report is the record of how you borrow and repay money, maintained by each of the three nationwide credit bureaus: Equifax, Experian, and TransUnion. Lenders and other companies report your activity to the bureaus, which compile it into a report that includes your account balances, payment history, credit limits, and any collections, public records, or recent inquiries.

Your credit score is the three-digit number calculated from that report. Scoring companies like FICO and VantageScore take the data on file and run it through their formulas. Because each bureau may have slightly different information on you, your FICO Score can vary by a few points from one bureau to the next. Most consumer scores fall on a 300 to 850 scale.

How credit scores are calculated

FICO and VantageScore weigh five main categories of information from your credit reports. The exact weighting varies between the two models, but the FICO model, used in roughly 90% of U.S. lending decisions per FICO, looks at the following five factors. Understanding each one is the foundation for improving your score.

Payment history (35%)

Payment history is the single biggest factor in your FICO Score. It tracks whether you've paid your credit accounts on time, including credit cards, mortgages, auto loans, student loans, and other installment loans. Even one payment that's 30 or more days late can take a noticeable bite out of your score, and the impact grows the longer a payment is overdue. Collections, charge-offs, and bankruptcies can stay on your credit report for up to seven years (10 for some bankruptcies) and weigh heavily against you.

Credit utilization (30%)

Credit utilization is the percentage of your available revolving credit that you're currently using, mostly credit cards and lines of credit. If you have a $10,000 total credit limit and a $3,000 balance, your utilization is 30%. As a general rule, Experian recommends keeping utilization below 30%, and people with the highest scores often keep it under 10%. High utilization signals that you might be relying too heavily on credit, which lenders read as a warning sign.

Length of credit history (15%)

This factor looks at how long you've had credit, including the age of your oldest account and the average age of all your accounts. Longer is generally better, which is why financial educators often recommend keeping older credit cards open. Closing a long-held card can shorten your average account age and shrink your available credit at the same time.

Credit mix (10%)

Credit mix considers the variety of accounts on your report. A healthy combination of revolving credit (like credit cards) and installment loans (like an auto loan or mortgage) shows lenders that you can handle different types of debt. You don't need to open new accounts just to improve your mix, since this is a smaller factor, but a diverse profile can give your score a modest lift over time.

New credit (10%)

New credit looks at how many recently opened accounts you have and how many hard inquiries are on your report. Each time you apply for new credit, the lender typically pulls your credit report, which counts as a hard inquiry and can lower your score by a few points. Multiple inquiries in a short window suggest you may be in financial distress or about to take on a lot of new debt. Most hard inquiries fall off your report after two years, and their effect on your score fades much sooner than that.

What's considered a good credit score?

A FICO credit score of 670 or higher is generally considered good, while 740 and above is considered very good and 800+ as exceptional. Most lenders reserve their best rates for borrowers with scores above 740. The average U.S. FICO Score was 714 in early 2026, according to FICO's Spring '26 Credit Insights report, which puts most Americans squarely in the good range. Here's how the FICO ranges break down, according to FICO:

For specific loan products, the cutoffs can vary. FHA-insured mortgages, for example, require a minimum FICO Score of 580 for the 3.5% minimum down payment, and scores between 500 and 579 require a 10% down payment per HUD. Conventional loans backed by Fannie Mae typically look for scores of 620 or higher, with the best rates reserved for borrowers above 740.

FICO Score vs. VantageScore: What's the difference?

FICO and VantageScore are the two dominant credit scoring models in the U.S., and while they look at similar information, they're not identical. FICO has been the industry standard for decades and is used in the vast majority of lending decisions. VantageScore was created jointly by the three nationwide credit bureaus and has gained ground in recent years, especially in free credit-score services like the one offered through many banking apps.

Several FICO models are in active use. The most common consumer version is FICO Score 8, and newer versions include FICO Score 9, FICO Score 10, and FICO Score 10T, which incorporates trended data. Trended data means the model looks at how your balances change over time, not just where they stand on the day your score is pulled. Mortgage lenders have historically used older bureau-specific FICO models (FICO 2, 4, and 5).

The mortgage industry is in the middle of a major scoring update. On April 22, 2026, the Federal Housing Finance Agency (FHFA) and the U.S. Department of Housing and Urban Development (HUD) jointly announced that Fannie Mae, Freddie Mac, and the Federal Housing Administration will adopt FICO Score 10T and VantageScore 4.0 alongside the long-standing Classic FICO model. A limited rollout of approved lenders can deliver VantageScore 4.0 loans to Fannie Mae and Freddie Mac immediately, and FHFA expects to publish historical FICO 10T scores in summer 2026 to support broader adoption. Both newer models incorporate trended data and can factor in on-time rent payment history, a meaningful change for renters and thin-file borrowers.

Hard inquiries vs. soft inquiries

Not every credit check affects your score. There are two kinds of inquiries on your credit report, and only one of them can drop your number.

Hard inquiries happen when a lender checks your credit because you've applied for new credit, such as a mortgage, auto loan, credit card, or personal loan. Each hard inquiry can lower your FICO Score by a few points and stays on your report for up to two years, although the impact typically fades within a year. Multiple hard inquiries in a short period can have a bigger effect, especially if you don't have much credit history.

Soft inquiries don't affect your score at all. They happen when you check your own credit, when a card issuer pre-approves you for an offer, or when an employer runs a background check (with your permission). You can pull your own credit report as often as you'd like.

One useful rule: Rate shopping for a single product, like getting auto loan quotes from several lenders within a few weeks, is typically grouped as one hard inquiry by both FICO and VantageScore. That means you can compare offers without taking a bigger hit.

Ways to improve your credit score

Improving your credit score is mostly about consistent habits, not quick fixes. Some changes show up in your next score update. Others take months. If you want to raise your credit score, focus on the actions that move the biggest factors.

1. Pay every bill on time. Payment history is 35% of your FICO Score, so this is the highest-leverage habit you can build. Set up autopay for at least the minimum payment on every credit account to avoid accidental misses.

2. Keep credit utilization below 30%. Pay down credit card balances before your statement closes, or make a mid-cycle payment to lower the balance the bureaus see. If you can keep utilization under 10%, even better.

3. Don't close old credit cards. An old account in good standing helps your average account age and adds to your total available credit. If a card has no annual charge, it's usually worth keeping open and using occasionally to keep it active.

4. Limit new applications. Each hard inquiry takes a small bite out of your score, and several in a row can compound the effect. Apply only when you need to, and avoid opening multiple new cards close together.

5. Dispute errors on your credit report. Mistakes happen, like accounts that aren't yours, balances that don't match, or payments marked late by accident. The Consumer Financial Protection Bureau (CFPB) provides free guidance and sample dispute letters for filing a correction with the credit bureaus.

6. Check your reports regularly. Catching problems early is easier than fixing them after they hurt your score. Free weekly reports from all three bureaus have been available at AnnualCreditReport.com since the program became permanent in 2023.

Your credit reporting rights

The Fair Credit Reporting Act (FCRA) gives every U.S. consumer specific rights around what's in their credit file and how it's used. Federal law entitles you to a free credit report from each of the three nationwide bureaus every 12 months, and since 2023, free weekly credit reports from each bureau have been permanently available at AnnualCreditReport.com, the only government-authorized source. You also have the right to dispute information you believe is inaccurate, and if you're worried about identity theft, you can place a free credit freeze on your file at each bureau. The CFPB is the primary federal regulator for credit reporting and offers free guidance on disputes, freezes, and credit-related fraud.

Build the financial foundation a strong credit score deserves

Your credit score is one piece of a bigger picture, and the habits that move it (paying on time, not maxing out credit, planning ahead) are the same habits that build long-term financial wellness. A solid Emergency Savings cushion, for instance, can keep you from leaning on credit cards when life throws something unexpected your way, which helps protect your utilization and your payment history at the same time.

Acorns is a financial wellness company built to make those habits automatic. With Acorns Invest, you can start investing in an expert-built, diversified portfolio with as little as $5. Round-Ups® round up your everyday purchases to the nearest dollar and invest the spare change. Acorns Later automates retirement contributions to a Traditional, Roth, or SEP IRA. Acorns plans start at $3/month, with no hidden fees, ever.

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Frequently asked questions

What is a credit score?

A credit score is a three-digit number, typically from 300 to 850, that lenders use to estimate how likely you are to repay borrowed money.

Higher scores generally mean lower risk to lenders, which can translate into easier approvals and lower interest rates. Your score is calculated from information in your credit reports, including payment history, how much credit you're using, the length of your credit history, your credit mix, and recent new credit activity.

What is the difference between FICO and VantageScore?

FICO and VantageScore are the two main consumer credit scoring models in the U.S. Both run on a 300 to 850 scale and weigh similar information, but they're built by different companies and use slightly different formulas.

FICO, created by Fair Isaac Corporation, is used in roughly 90% of U.S. lending decisions. VantageScore was created jointly by Equifax, Experian, and TransUnion, and it shows up most often in free credit-score services. The two models can produce different numbers for the same person on the same day, but they generally move in the same direction.

What is considered a good credit score?

A FICO Score of 670 or higher is generally considered good. Scores from 740 to 799 are very good, and 800 and above are exceptional.

Anything below 670 is considered fair or poor, which can mean fewer approvals and higher interest rates. The average U.S. FICO Score sat at 714 in early 2026, putting most Americans squarely in the good range.

What factors affect my credit score the most?

Payment history and credit utilization are the two biggest factors in your FICO Score, together accounting for 65% of the calculation.

Payment history makes up 35%, so paying every bill on time, every time, is the most important habit you can build. Credit utilization makes up 30%, so keeping your credit card balances well below your limits, ideally under 30%, is the second most important. The remaining factors are length of credit history (15%), credit mix (10%), and new credit (10%).

How can I improve my credit score quickly?

The fastest way to move your credit score is to pay down high credit card balances and make sure no payment is more than 30 days late.

Lowering credit utilization can show up in your score within a billing cycle or two, which is faster than most other changes. Beyond that, set up autopay, hold off on new credit applications, leave old accounts open, and dispute any errors you find. Long-term, consistent on-time payments are the most reliable way to build a strong score.