If you’re hoping to take out a home or refinance loan, you may have had a mortgage lender or broker asks you for your credit score and FICO score as part of the approval process. But you have no idea what it FICO score is.
It’s not uncommon and it’s important to understand the difference between credit score vs FICO score when the answer can impact your loan approval.
But what are Fico score and credit score and how is it different? In this article, we will demonstrate the difference between credit score and Fico score.
Read on!
Credit Score vs Fico Score Differences
When it comes to credit scores, there are two main types: credit score and FICO score. So, what are the differences between the two?
Credit scores are calculated based on your credit history, which includes things like your payment history, credit utilization, and credit mix.
On the other hand, FICO scores are calculated using your credit report from the three major credit bureaus. It takes into account your credit history as well as your current financial situation.
What Factors Affect Both
There are a few key differences between credit scores and FICO scores. Credit scores are based on credit report information, whereas FICO scores are based on credit report information and other factors, such as income and employment history. FICO scores are also generally higher than credit scores.
What factors affect both credit scores and FICO scores? Payment history, credit utilization, credit mix, and length of credit history are all factors that affect both credit scores and FICO scores.
They take into account the amount of debt you currently have, as well as the length of your credit history.
Improving Credit and FICO Scores
Both your credit score and FICO score can impact your ability to get approved for loans and lines of credit, and may also influence the interest rates you’re offered.
But they measure different aspects of your credit history, it’s possible to have a good credit score but a poor FICO score (or vice versa).
If you’re looking to improve your creditworthiness, you’ll need to focus on both to get good business credit. Some general things you can do to improve both include paying your bills on time, maintaining a good credit history, and using a mix of different types of credit.
Learn About Credit Score vs Fico Score Today
It’s important to understand the difference between a credit score vs FICO score because they are two different things.
A credit score is a numerical value that represents your creditworthiness, and a FICO score is a credit score that is used by lenders to make decisions about loan approval and interest rates.
If you’re looking to improve your credit, it’s important to understand the difference between these two types of scores. Paying your bills on time and keeping your credit utilization low are both key factors in improving your score.
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