When it comes to qualifying for various loans or credit cards, having a good credit score is key. If you apply for a loan and your credit score is not where it should be, you risk being denied to the loan.
For this reason, many people want to know their credit score so they can work to improve it. However, there’s a lot of “mysterious” talk about credit scores that many people don’t understand.
Keep reading to learn about what is a FICO score vs credit score, what their differences are, and why it’s so impactful in your life.
What Is a FICO Score vs Credit Score?
Knowing the roles and differences between a FICO score and a credit score is important. It can help you better understand your financial situation and make informed decisions about your credit. So let’s start digging deeper!
FICO Score
Your FICO score is a credit score created by the Fair Isaac Corporation and is considered a primary factor. It’s a number that is used to predict how likely you are to repay a loan.
This is based on information in your credit report from the three major credit reporting agencies: Equifax, Experian, and TransUnion. It is also based on your employment history and income.
Your FICO score is a number from 300 to 850. The higher your score, the better. A score of 700 or above is considered good. A score of 800 or above is considered excellent.
It is important to keep track of your FICO score because it can impact your ability to get a loan, credit card, or even a job.
Credit Score
A credit score is a statistical number that evaluates a consumer’s creditworthiness and is based on credit report information typically sourced from credit bureaus.
Your credit score is based on your credit history, which is a record of your borrowing and repayment activity. Lenders use credit scores to evaluate the probability that an individual will repay a loan. They can determine whether or not to extend your credit, and if so, what interest rate you will be charged.
Your credit score is considered a risk score, and it’s a number from 100 to 1,000. Like FICO score, the higher your credit score is, the better.
The lower the risk you pose to lenders, the better your chances of getting approved for a loan with a low-interest rate.
Improve Your FICO Score and Credit Score
To improve your FICO score and credit score, you need to start by paying your bills on time. Always try to keep your balances low, and if you have any debt, try to pay it off as quickly as possible.
You can also try to avoid opening new credit accounts unless you need to. Check out nav.com for more information about credit cards.
Grab Your Cards Now!
As a cardholder, you might be asking what is a FICO score vs credit score. These scores will be your numerical representation of your creditworthiness.
Knowing the difference between these two scores can help you better understand your financial situation and make informed decisions about borrowing and credit. Be a cardholder that is responsible and mindful of what you need!
Do you want to read more about lifestyle, and finance topics? Check out the latest news on our website today!
