When evaluating your financial health, terms like the FICO score and credit score often come up. Both are crucial in determining your creditworthiness, but they serve slightly different purposes and are calculated differently. Whether you're applying for a loan, credit card, or mortgage, understanding these scores can help you assess your eligibility and take the required measures accordingly. Let’s learn about the FICO scores and credit scores in detail.
Before we dive deep into the differences between the 2 scores, it is essential to know what a credit score and FICO score are:
Credit Score
A credit score is a numerical representation of an individual's creditworthiness, calculated by various credit bureaus. In India, the 4 RBI-regulated credit bureaus - Experian, Equifax, TransUnion CIBIL, and CRIF High Mark, each have their own credit scores. These vary slightly depending on the scoring model used. However, they typically assess the same factors like payment history, credit utilisation, and length of credit history.
FICO Score
A FICO Score is a specific type of credit score generated by the Fair Isaac Corporation (FICO). The score ranges from 300 to 850 and is used by lenders to assess your creditworthiness. FICO scores are calculated based on factors such as length of credit history, payment history, new credit, amounts owed, and types of credit used. It is a score which is predominantly used by most lenders in the United States of America. It is one of the most prominent credit scoring models that credit bureaus use as a benchmark and example when creating their own scores across the world.
Here are some major differences between the two scores:
Aspect |
FICO Score |
Credit Score |
Definition |
A specific type of credit score developed by the Fair Isaac Corporation (FICO) |
A general term for scores used to assess creditworthiness |
Scoring |
Offers industry-specific versions, such as FICO Auto Score and FICO Bankcard Score, which are tailored for auto loans and credit cards, respectively |
Typically uses a general scoring model and differs from one bureau to another, even if the factors considered are similar |
Accessibility |
Often provided for free through specific lenders or credit card issuers, but generally harder to access directly without a subscription to services like myFICO |
Many financial marketplace apps and websites, like Bajaj Markets, provide free credit scores from TransUnion CIBIL which is widely accepted in India |
Calculation Criteria |
Factors include payment history, credit utilisation, and length of credit history |
Varies based on the model and bureau, though similar criteria apply |
Consistency |
Generally consistent across lenders due to FICO’s standardised formula |
Can vary depending on the scoring model or credit bureau |
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Frequently Asked Questions
Which is better - FICO or credit score?
The choice between a FICO Score and a Credit Score depends on your specific financial requirements and the region you're in. In India, credit scores provided by bureaus like TransUnion CIBIL, CRIF High Mark, Experian, and Equifax are more relevant. This is because lenders primarily rely on these RBI-regulated and licenced credit bureaus for accurate details.
However, in regions where FICO is also used, your preference may depend on which score aligns better with the lender's criteria. It could differ depending on a specific financial product like a mortgage or credit card.
How do I check my FICO score?
You can check your FICO score through the official myFICO website or the myFICO app. These platforms provide detailed reports and insights into your FICO score, helping you understand your creditworthiness based on U.S. financial standards. Note that FICO scores are not widely applicable in India.
Do lenders look at FICO or Credit Score?
In India, lenders primarily use credit scores provided by domestic credit bureaus like CIBIL rather than FICO. A good CIBIL score (typically above 750) improves your chances of loan approval.
