Definition of 'FICO Score'
A type of credit score that makes up a substantial portion of the credit report that lenders use to assess an applicant's credit risk and whether to extend a loan.
FICO is an acronym for the Fair Isaac Corporation, the creators of the FICO score.
Investopedia explains 'FICO Score'
Using mathematical models, the FICO score takes into account various factors in each of these five areas to determine credit risk: payment history, current level of indebtedness, types of credit used and length of credit history, and new credit.
A person's FICO score will range between 300 and 850. In general, a FICO score above 650 indicates that the individual has a very good credit history. People with scores below 620 will often find it substantially more difficult to obtain financing at a favorable rate.
To learn more about how your credit score is calculated, read Does having several credit cards hurt my credit score?