Fico Score vs. Credit Score

Credit scores as well as fico scores are numerical expression of person creditworthiness based on the person's past credit history.

Credit scores are generated based on the statistical analysis of a person's credit report. It is a number that represents an assessment of the creditworthiness of a person, or the likelihood that the person will repay his or her debts.

Alternatively, credit scores are also used to determine insurance rates and for pre-employment screening. Employers as well as lenders use credit reports and scores to gain insight into the records and tendencies of prospective employees, making the assumption that credit scores correlate with general trustworthiness.

Fico score is the credit score calculated on the basis of a formula developed by The Fair Isaac Corporation (FICO) in 1956, and used by all three major credit reporting agencies in the U.S. The algorithm is kept secret, but it is probably based upon the ratio of debt to available credit, which is proxy of income.

The fico score is adjusted for payment history, number of recent credit applications, types of credit used and its length, negative events such as bankruptcy/foreclosure, as well as changes in income caused by changes in employment or family status.

A FICO score for individual person range between 300 and 850. Highest creditworthiness is associated with a FICO score above 650. People with scores below 620 have rather limited access to financing at a favorable rate.

So, in summary:

Both credit scores as well as fico scores are numbers which tells the lender if the individual is able to repay the loan if granted. More and more are often used also by other people (employers) to assess the credibility of the other individual. "Regular" credit score and fico score differ in terms of formula used to its calculation.