What Is FICO? Your Essential Guide to Credit Scores (2026)
What Is FICO? Your Essential Guide to Credit Scores (2026)
FICO is a type of credit score that lenders use to assess your creditworthiness. It ranges from 300 to 850, with higher scores indicating better credit. According to the Fair Isaac Corporation, which created the FICO score, a score above 670 is considered good.
Why This Matters
Your FICO score can significantly impact your financial life. A better score can mean lower interest rates, saving you hundreds or even thousands of dollars over a loan's lifetime. For example, improving your score could reduce your mortgage interest by 1%, which might save you over $30,000 on a typical 30-year loan.
Understanding FICO Scores
Let's dive deeper into what a FICO score is and how it works.
What Factors Affect Your FICO Score?
- Payment History (35%): Late payments can drastically lower your score.
- Amounts Owed (30%): High credit card balances relative to limits can hurt your score.
- Length of Credit History (15%): A longer credit history can improve your score.
- New Credit (10%): Opening several new accounts in a short period can lower your score.
- Credit Mix (10%): A diverse mix of credit types (credit cards, loans) is preferable.
Understanding these factors can help you take action to improve your score.
Steps to Improve Your FICO Score
- Pay bills on time: Set up automatic payments to never miss a due date.
- Reduce your debt: Aim to keep balances below 30% of your credit limits.
- Keep old accounts open: The age of your credit accounts can boost your score.
- Limit new credit inquiries: Only apply for new credit when necessary.
- Use BON Credit: The app can monitor your score and suggest specific actions.
BON Credit does this automatically — for free. It scans your accounts, finds what's costing you money, and tells you exactly what to do. Download the app →
Common Mistakes and Myths About FICO Scores
Many people believe checking their credit score lowers it, but this is a myth. Soft inquiries, such as checking your own score, don't affect your credit. Another mistake is closing old accounts thinking it will improve your score — it can actually lower it. Understanding these can prevent costly errors.
FAQ
What is a good FICO score?
A good FICO score is generally considered to be 670 and above.
How often should I check my FICO score?
Check your FICO score regularly, at least once a month, to monitor for changes and fraudulent activities.
Can I improve my FICO score quickly?
Yes, by paying off credit card balances and making timely payments, you can see improvements in a few months.
Does BON Credit help with FICO scores?
Yes, BON Credit helps monitor your FICO score and provides personalized tips to improve it.
Let BON Credit help you manage and improve your FICO score effortlessly. Start today and see how much you can potentially save. Get the app now →
- FICO scores range from 300 to 850; above 670 is good.
- Improving your score can save you thousands on loans.
- Regular monitoring and strategic actions can boost your score.
- BON Credit offers free FICO monitoring and personalized advice.