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What is FICO Score 8?

December 23, 2022

If you're looking to apply for a loan or credit card, you're likely familiar with the term "credit score." Your credit score is an important factor that lenders use to evaluate your creditworthiness and determine the interest rates and terms of the loan or credit line. However, not all credit scores are created equal.

Enter FICO Score 8. Lenders widely use this particular credit scoring model to assess the credit risk of their applicants. It considers various factors such as payment history, credit utilization, length of credit history, and more to come up with a score ranging from 300 to 850. But what sets FICO Score 8 apart from other credit scoring models?

In this quick guide to FICO scores, we'll dive into the specifics of FICO Score 8 and discuss why it's important for anyone looking to build or maintain their credit score. We'll break down how this scoring model works and what factors are considered and discuss tips for improving your credit score with Cheese, regardless of the scoring model you use.

FICO Score Definition

A FICO score is a credit scoring system created by Fair Isaac Corporation. It assesses a person's creditworthiness and helps lenders make informed decisions about granting loans or extending credit. The current FICO score range is between 300 to 850, with a score of 670 and above generally considered good. 

However, there’s more than one type of FICO score. For example, the FICO Score 8 model was introduced in 2009 and is currently the most widely used credit scoring model (which we’ll get into in just a second). Overall, knowing that your FICO score is essential in determining your creditworthiness and financial health is important.

What is FICO 8?

FICO Score 8 is the most widely used credit scoring model in the United States. It’s calculated by considering various factors like your:

  • Payment history
  • Credit utilization
  • Length of credit history
  • New credit accounts
  • Types of credit accounts

As mentioned above, the FICOS Score 8 range is the same as other FICO score ranges; the credit range is from 300 to 850, with a higher score usually indicating a better credit profile. What’s a good FICO score? At least 670, with that range going up to 739. Anything 740 or above is considered “very good,” while anything 800 and higher is considered “exceptional.”

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We’ll dive into the specifics of FICO Score 8 vs. other previous models below. However, it’s helpful to know that variations of FICO Score 8 have also been specifically tailored for different industries. 

For instance, FICO Bankcard Score 8 focuses on a person's credit card activity and history, making it particularly relevant for those applying for credit cards. On the other hand, FICO Auto Score 8 places less weight on credit card activity and may be more applicable to individuals seeking auto loans.

How is FICO 8 Different From Previous Versions?

One of the most significant differences between FICO Score 8 and previous versions is its sensitivity to high utilization of credit lines. FICO Score 8 considers the percentage of credit used on your credit lines, and as such, it’s essential to ensure that you stay below 30% credit utilization.

However, FICO 8 includes some positive changes compared to previous versions. The scoring model now ignores accounts in collections with balances under $100. This means that accounts that were once considered derogatory and harmful to your FICO score no longer have an impact as long as the balance is under $100. This is a significant improvement as previous credit scoring models factored in all collection accounts, regardless of the account's balance.

Furthermore, FICO Score 8 is more forgiving of occasional late payments of up to 30 days, given that all other accounts are in good standing. In previous models, a single late payment could significantly impact your FICO score, dragging it down for an extended period, even if you were otherwise a responsible borrower.

FICO 8 vs. 9 and 10

After introducing FICO Score 8 in 2009, FICO waited until 2016 to introduce the newer credit scoring model, FICO Score 9, followed by FICO Score 10 in 2020. Although FICO 8 remains the more popular scoring system, FICO 9 comes with features that may appeal to a certain group of consumers who wish to embellish their credit scores. 


One of the distinguishing features of FICO 9 is its treatment of third-party collection accounts that have been paid in full. Unlike the previous model, FICO 9 disregards these accounts and does not count them against the consumer's credit score. 

Additionally, FICO 9 places less weight on unpaid medical collection accounts than it does on other types of outstanding collection accounts, thereby reducing the negative impact on a borrower's credit score (an important factor considering that 2020 reports showed that Americans’ collective medical debt totaled at least $195 billion in 2019).

Another noteworthy characteristic of FICO 9 is that it considers rental history when computing credit scores, a valuable feature for people with limited credit history. This means that timely rental payments, long-term leasing agreements, and a history of evictions or missed rent payments can impact a user's credit score positively or negatively, depending on how the information is processed.


FICO Score 10 is designed to be the most predictive scoring model yet, offering the most accurate analysis of someone’s credit risk to lenders. 

It’s more comprehensive because it looks at data from the previous 24 months (or longer) and offers more in-depth insight into someone’s financial behavior (like whether they pay their credit card balances in full each month or have ever consolidated debt).

FICO 8 vs. Vantage Score 3.0

Regarding credit scores, FICO Score 8 and VantageScore 3.0 are two common models that lenders and credit bureaus use to determine a borrower's creditworthiness. Although they use similar factors in their calculations, they have significant differences.

One of the differences is the scoring criteria. FICO Score 8 requires one of your accounts to be active for at least six months before generating a score, while VantageScore 3.0 doesn't have a minimum credit history requirement.

Another difference is how they handle inquiries. FICO treats multiple hard inquiries within 45 days as a single inquiry, while VantageScore treats multiple hard inquiries within 14 days as a single inquiry.

Other differences include how they treat late payments and the weighting of different factors. FICO Score 8 gives more weight to late payments than VantageScore, while VantageScore provides influence descriptions for five major categories versus FICO's precise percentage allocations.

So, when it comes to VantageScore vs. FICO, which score is most important? Your FICO score is likely the one used by most lenders. However, you are likelier to see your VantageScore listed on credit monitoring websites like Credit Karma or Capital One.

Where is FICO 8 Used?

FICO Score 8 is widely used by lenders, credit card issuers, and other financial institutions in the United States to evaluate credit risk and determine creditworthiness for various types of loans, including mortgages, credit cards, and personal loans. It is one of the most popular credit score models used by over 90% of top lenders in the United States.

How to Improve Your Credit Score

Improving your credit score is essential for obtaining loans, mortgages, credit cards, and other financial products. Here are some simple strategies to help you improve your credit score (regardless of whether it’s FICO Score 8 or VantageScore):

  • Pay Bills on Time: Late payments, missed payments, and defaults negatively affect your credit score. Ensure you pay your bills on time, including credit card bills, loans, rent, and utilities.
  • Keep Credit Utilization Low: Ideally, you should keep your credit utilization below 30% of your credit limit. High credit utilization may indicate that you rely too heavily on credit or may not have the means to repay your debts.
  • Mix Different Credit Types: A healthy mix of credit accounts, such as credit cards, mortgages, and personal loans, can positively impact your credit score.
  • Keep Old Credit Accounts Open: Length of credit history significantly contributes to your credit score. Keeping old accounts open, even if you don't use them, can help boost your score. If you close accounts, it will reduce the average age of your accounts and reduce your available credit.
  • Check Your Credit Report Often: Credit reports may have errors that negatively impact your credit score. Monitoring your credit report regularly helps identify and correct any issues.

These simple strategies can improve your credit score and help you achieve your financial goals. However, if those don’t work, we suggest you try to…

Increase Your Credit Score with Cheese Credit Builder

Our credit builder app provides easy access to credit builder loans, which can help you boost your credit rating. We report every payment made to the major credit bureaus, meaning your score will steadily increase with each payment.

Take control of your finances today and enjoy the benefits of using Cheese. Sign up now and take your first step toward a better credit score!

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