What Is FICO Score? Understand It and Save Big in 2026
What Is FICO Score? Understand It and Save Big in 2026
A FICO score is a three-digit number ranging from 300 to 850 that shows how likely you are to repay borrowed money. This score is used by lenders to decide if you qualify for a loan and what interest rate you will get. According to the Federal Reserve, a higher FICO score can save you thousands in interest over a loan’s lifetime.
Why This Matters
Your FICO score can cost or save you big bucks. With a score above 700, you might get the best interest rates, potentially saving up to $1,000 a year compared to someone with a lower score. But if your score is below 600, be prepared to pay much more. That’s why monitoring and improving your score is crucial.
Understanding the FICO Score
Your FICO score is made up of five factors:
- Payment history (35%): Have you paid past credit accounts on time?
- Amounts owed (30%): How much of your available credit are you using?
- Length of credit history (15%): How long have your credit accounts been active?
- Credit mix (10%): Do you have a mix of different types of credit?
- New credit (10%): Have you opened several new accounts recently?
How to Improve Your FICO Score
- Pay bills on time: Set up automatic payments to never miss a due date again.
- Reduce your debt: Aim to use less than 30% of your credit limit on each card.
- Keep old accounts open: Longer histories can improve your score.
- Check your credit report: Look for errors and dispute any inaccuracies.
- Avoid new credit: Only apply for new credit when necessary.
Stop leaving money on the table. BON Credit finds it for you — at zero cost.Get started free →
Common Mistakes and Myths
Many people think checking their FICO score will hurt it. Not true. This is a myth. Checking your own score is considered a 'soft inquiry' and doesn’t impact it. Another mistake is closing old credit accounts thinking it will help your score. It actually might hurt it by reducing your credit history length and credit limit.
FAQ
What is a good FICO score?
A good FICO score is generally considered to be 670 or higher. Scores between 740 and 799 are very good, and 800 and above are excellent.
How often does my FICO score change?
Your FICO score can change as often as your credit report is updated, which can be monthly, weekly, or daily.
Can I have multiple FICO scores?
Yes, you can have multiple scores because there are different FICO scoring models used by lenders for different types of credit.
Don't miss out on potential savings. BON Credit helps monitor your FICO score for free.Download the app now →
- Your FICO score is crucial for loan approvals and interest rates.
- Improving your score can save you up to $1,000 annually.
- Regularly check your score with BON Credit to stay on top of your finances.