FICO 101, What is a FICO Score?

The FICO® score is the credit score derived by the FICO credit scoring model, which was developed by FICO, headquartered in Minneapolis, Minnesota.  FICO introduced the first version of its ubiquitous score in the late 1980’s and there have been many updated versions since.

FICO scores predict consumer credit risk and credit behavior. These scores were built by FICO using consumer credit data from each of the three major Credit Reporting Agencies (CRA’s) Equifax, Experian and TransUnion. Statistical analysis is conducted using current and historical data to predict future credit behavior.  This is called “regression.”

Finally, there are many versions of the FICO score at each CRA.  As a consumer you know all of them collectively as “FICO” scores, but they actually have branding at each of the CRAs.  To the credit grantors the FICO scores are known as:

BEACON® at Equifax

Experian/Fair Isaac Risk Model at Experian

FICO Risk Score Classic® at TransUnion (formerly known as EMPIRICA)

The similarities and differences among the scores at the three CRA’s are:


  • The score ranges are the same; from 300 to 850.
  • A low score represents high risk and high score represents low risk.  In other words, the higher the score the lower the risk to the credit grantor which is good for the consumer.
  • The score value means the same at each CRA. A 700 is basically the same risk regardless of what credit bureau’s data was used to calculate the score.
  • The same statistical methods used to develop the scores.


  • Each credit bureau’s version of the FICO score is built on data from that credit bureau.
  • The scores will likely differ by CRA because their data isn’t the same.  Your Equifax report looks different than your TransUnion report which looks different than your Experian report.

Your credit score can change when data is updated or added to your credit report. Since this can happen often, your credit score can also change often.  This explains why your score changes each time you receive your score.


The FICO score is used by the majority of the credit grantors to approve mortgages, auto loans, and credit cards. There is no single universal score required by lenders to approve or deny any application.  Each credit grantor selects their own threshold based on their experience with past due cards and loans.

The score is used to determine interest rates and products to offer, such as premium cards. Other information (besides a score) is also used in this process such as income, rent, and presence of savings and checking accounts.

You can purchase FICO scores from Equifax and TransUnion through   Consumers cannot purchase the FICO version from Experian as of February 14, 2009.  Credit grantors can purchase FICO scores from all three CRA’s including Experian.

John Ulzheimer is the President of Consumer Education at, the credit blogger for, and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and, John is the only recognized credit expert who actually comes from the credit industry.


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