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Credit scores measure your financial health at a given point in time. Ideally, your score increases as you build your credit history, so a sudden decline can leave you wondering why.

Several things can cause a credit score to fall 100 points (or more), and late payments are often at the top of the list. Here’s a closer look at why credit scores decrease. 

Why Did Your Credit Score Drop 100 Points?

A credit score can drop by 100 points or more when there’s a significant change to your credit reports. Possible reasons for a credit score drop of 100 points or more include:

•   Late payments

•   Missed payments

•   High balances relative to your credit limits

•   Reduced credit limits

•   Delinquencies and collection accounts

•   Bankruptcy filing

•   Foreclosure or repossession

•   Judgments

•   Multiple inquiries for new credit in a short timespan

•   New credit accounts in your name1

These types of items can drag your score down. Paying off loans or closing credit card accounts can also cost you credit score points, even though you might consider them positive financial steps. 

Identity theft and fraud can trigger a sizable drop in your credit score as well. If someone uses your identity to obtain loans or open lines of credit without your knowledge, that could leave you vulnerable to late or missed payments, delinquencies, and collection actions. A money tracker app can help you keep tabs on your credit score, and you’ll also get updates when it changes. 

Should You Be Worried About Your Credit Score Dropping?

A credit score drop can be worrisome, especially if you weren’t expecting it. You may have cause for concern if you:

•   Plan to apply for a mortgage or another type of loan soon

•   Would like to refinance an existing debt that you have at a lower interest rate

•   Suspect that someone may be using your identity to obtain credit fraudulently

Fluctuating credit scores could make it more difficult to get approved for new loans. If you are approved, a lower score could result in a higher interest rate. 

Identity theft is a more serious matter. You may not even be aware that someone is using your identity to obtain credit in your name until you’re denied credit, or worse, sued for an outstanding debt you didn’t create. 

Reasons Your Credit Score Went Down

Why did my credit score drop by 100 points for no reason? The short answer is that it didn’t. There must be some change to your credit report to result in a score decline. 

Changes that can show up on your credit reports include:

•   New accounts opened in your name

•   Account closures

•   Changes to your balances or credit limits

•   Payment activity, including late payments or missed payments

•   Delinquencies and accounts that are sent to collections

•   Paid off balances

•   Debt settlements, in which your creditors agree to let you pay off less than what you owe

•   New inquiries for credit1

Inaccurate information can also harm your credit. Between 2021 and 2023, consumer complaints about credit report errors increased by 168%, according to the Consumer Financial Protection Bureau (CFPB). Credit report errors can range from payments being incorrectly reported to accounts listed as belonging to you that are not yours.2 

In some cases, a credit score drop might be caused by someone else. This can happen when you cosign a loan for someone. As the cosigner, you’re legally responsible for the debt. Any activity relating to the account, including late or missed payments, can show up on your credit report.3 

What Can You Do If Your Credit Score Dropped by 100 Points?

If your credit score drops by 100 points or more, the first thing to do is determine why. Obtaining copies of your credit reports can shed some light on what may be causing the decline. 

Here are some things to look for as you review your reports:

•   Missing or incorrect payment history

•   Incorrect balance information

•   Accounts that don’t belong to you

•   Collections for debts that don’t belong to you

•   Loan accounts you’ve paid off that still show a balance

•   Open accounts that are listed as closed or vice versa

•   Duplicate debts, meaning the same account is listed multiple times

If you identify what you believe is an error or inaccuracy, you have the right to dispute it with the credit bureau that’s reporting the information. Equifax, Experian, and TransUnion — the three major credit bureaus — all allow you to initiate credit report disputes online.4 

Why did my credit score drop over 100 points when there were no errors? That’s trickier to answer, as it depends on the information in your credit file. If there are no errors or inaccuracies, then you’ll need to consider things like payment history, credit limits, and debt balances to see if they’ve had any impact on your score. 

Examples of Credit Score Dropping

Hopefully, you never have to deal with a major credit score drop. But it may help to have some examples of what can cause your score to go down. 

•   You’re ready to buy a home and are shopping for a mortgage lender. You find the one you want to work with and apply for a loan. You’re approved, but the new inquiry and associated debt on your credit reports lead to a score drop. 

•   You cosign a car loan for your niece, on the promise that she’ll make the payments on time. She loses her job but doesn’t tell you and the loan payments go unpaid for six months. The lender repossesses the vehicle, which lands on your credit report and costs you credit score points. 

•   You make the final payment to your student loans. The account is now listed as closed and paid in full on your credit reports, but it lowers your score. 

Again, not all things that lead to a credit score drop are negative. Paying off debt, for example, is something to celebrate even though it can ding your credit to a degree. 

How to Build Credit

How long does it take to build credit? There’s no simple answer, as it can depend on what you’re doing (or not doing) to recover lost credit score points. 

Some of the most effective strategies for building credit include:

•   Paying bills on time to establish a positive payment history

•   Keeping the balances on your credit cards low or paying in full each month

•   Paying down debt that you already have

•   Periodically requesting credit limit increases from your credit cards (but not running up new debt against them)

•   Leaving older credit accounts open, even if you don’t use them

•   Using different types of credit, such as loans and credit cards

•   Limiting how often you apply for new credit

You can also build credit as an authorized user on someone else’s credit card. Authorized users have charging privileges on the card and account activity will show up on their credit reports, but they’re not legally responsible for the debt.5

Having a checking or savings account typically doesn’t affect credit scores. Banks can, however, report negative activity related to closed accounts to ChexSystems, a consumer credit reporting agency. A negative ChexSystems report could make it difficult to get approved for a new bank account. 

Allow Some Time Before Checking Your Score

If you recently checked your credit following a score drop, you may want to wait a while before checking it again. Credit scores change when there’s new information added to your credit reports, whether it’s something positive or negative. 

It may be helpful to check your credit monthly or quarterly if you’re working on rebuilding your score. That way, you can track your progress against any steps you’re taking to improve your score to see what’s working. 

At a minimum, it’s a good idea to check your credit at least once annually. That can allow you to see what’s changed over the last year and look for any suspicious or potentially fraudulent activity. 

Pro tip: Use a free credit monitoring service to get regular credit score updates. 

Recommended: How to Check Your Credit Score Without Paying

Closing a Credit Card Account Can Hurt Your Score

Closing credit cards can hurt your score if you still owe a balance at the time you close the account. Your credit utilization ratio measures how much of your available credit you’re using. When you close a credit card with a balance due, you automatically increase your credit utilization ratio.6

For example, let’s say you have a combined credit limit of $20,000 across five credit cards. You owe $6,000 in total debt to your cards, which makes your credit utilization ratio 30% ($6,000 / $20,000 = 0.3).

Now, assume that you owe $5,000 to one card alone. That card has a credit limit of $10,000. You close it, cutting your total credit limit in half. Now you have a credit utilization ratio of 60% ($6,000 / $10,000 = 0.6).

Some experts say that 30% or less is an ideal credit utilization ratio to aim for, while others target 10% instead. The main thing to remember is that the lower your credit utilization is, the less harmful changes can be to your score. 

In terms of how to lower credit utilization, you can do so by paying down credit card balances and/or increasing your credit limits. 

What Factors Impact Credit Scores?

If you’re wondering what affects your credit score, it’s not just one thing. FICO credit scores, which are the most commonly used among top lenders, are determined by five factors. 

•   Payment history: 35% of your score

•   Credit utilization: 30% of your score

•   Credit age: 15% of your score

•   Credit mix: 10% of your score

•   Credit inquiries: 10% of your score7

VantageScores are based on some of the same factors, though they’re calculated differently. The VantageScore model was developed by the credit bureaus as an alternative to FICO scores. 

Pros and Cons of Tracking Your Credit Score

Tracking your credit score can be beneficial but there are some potential downsides. Here’s a quick look at the advantages and disadvantages. 

Recommended: Why Did My Credit Score Drop After a Dispute?

How to Monitor Your Credit Score

Credit score monitoring services make it easy to track your credit scores and get notifications when there’s a change to your credit report. SoFi, for instance, offers free weekly credit score updates and access to a certified financial planner if you have questions about credit score changes. 

Regardless of which service you use to monitor your credit, keep track of changes as they’re reported. Specifically, look at which changes are positive and which are negative. That can guide you toward what you might need to do to improve your score. 

The Takeaway

Seeing your credit score drop by 100 points or more can be disheartening, but it’s not the end of the world. There are things you can do to get your score back on track. 

Tracking your money is a good place to start. Tools like a spending app connect all of your accounts in a single dashboard so you can understand the factors that are influencing your credit scores. You can also check your scores for free. It’s a simple way to take charge of your financial health while you work on building good credit. 

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

See exactly how your money comes and goes at a glance.

FAQ

Why did my credit score drop 100 points when nothing changed?

It may seem as if nothing has changed on your credit reports, but there must be some type of change for your score to be affected. If your score dropped, take time to review your credit reports thoroughly. Even a seemingly minor change, such as a new credit inquiry, could make a dent in your score. 

Why is my credit score going down if I pay everything on time?

Paying bills on time can help add points to your score, but it might still go down if you have a high credit utilization or apply for new credit frequently. Closing accounts could also hurt your score, even if you pay on time. Using a spending app to track bills and expenses can help you stay on top of your due dates.

How to dispute a credit score drop?

You can’t dispute a credit score drop, but you can dispute the information on your credit reports that you believed caused the drop. Keep in mind, however, that disputing credit report information isn’t guaranteed to improve your score. 

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About the author

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Photo credit: iStock/kate_sept2004

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .


Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SORL-Q324-009

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You may have heard of both FICO® and Experian, but the two companies serve different purposes.

FICO is a credit scoring model developed by the Fair Isaac Corporation (FICO) that lenders often use when assessing a borrower’s creditworthiness, or how likely they are to repay debts.

Experian, on the other hand, is one of the three major credit bureaus (along with Equifax and TransUnion) that collects credit and debt information and uses it to create individual credit reports. These credit reports offer more details about an individual’s credit history than FICO’s three-digit score.

Let’s take a closer look at what separates FICO vs. Experian, which credit score is the most accurate, and how to keep tabs on your credit score.

What Is the Difference Between Experian Score vs. FICO?

As we mentioned, Experian is a major credit reporting agency. It does not have its own credit scoring model. However, in 2006, it partnered with Equifax and TransUnion to create the VantageScore credit score model. Like FICO, VantageScore provides three-digit credit scores for consumers, though it uses slightly different factors and weightings.

The credit score Experian provides — sometimes called an “Experian score” — relies on both VantageScore and FICO Score.

FICO works differently. As a credit scoring model, it uses a proprietary algorithm to evaluate your credit risk. Specifically, the following factors affect your credit score:

•   Your payment history

•   The amounts you owe

•   The length of your credit history

•   How much new credit you have

•   The diversity of your credit mix

While FICO is used in the majority of lending decisions, some lenders use VantageScore.

Which Credit Report Is Most Accurate?

It’s common to have multiple credit reports, including ones with Experian, Equifax, and TransUnion. It’s also common to have minor differences in your credit file from bureau to bureau. That’s because lenders don’t always report the same information at the same time to every bureau. But rest assured, credit reports from all three credit bureaus are widely considered to be accurate.

That said, it’s a good idea to regularly review your credit report. You can access yours for free via AnnualCreditReport.com or through tools like a money tracker app.

If you find any errors or inconsistencies in your credit report, be sure to dispute them with the relevant credit bureau so the incorrect information can be removed.

Why Is My Experian Credit Score Different From FICO?

You may notice that your so-called Experian score is slightly different from your FICO Score. That’s because both scores are based on different scoring models. FICO uses its own algorithm, while Experian’s score uses both FICO and VantageScore.

While some variations are to be expected, if one score is drastically higher or lower than the other, it’s a good idea to review your credit reports and address inaccuracies.

Is Experian Better Than FICO?

No credit score is better than another. Some lenders prefer FICO, white others rely on VantageScore. Each model can provide lenders with different insights about a person’s financial habits.

The good news is that FICO and VantageScore generally calculate their scores with similar information, which means you can improve both scores simultaneously. Smart strategies include paying bills on time, keeping credit utilization low, and paying down balances.

Recommended: How Long Does It Take to Build Credit?

Is a FICO Score the Same as a Credit Score?

When comparing a FICO Score vs. a credit score, it’s important to understand that a FICO Score is a type of credit score. But of course, it’s not the only type of credit score.

VantageScore, for example, issues credit score models such as VantageScore 4.0 and VantageScore 4plus™. Experian, Equifax, and TransUnion also provide credit scores based on data in your credit report.

What Is My Real Credit Score?

There is no one true credit score. Instead, banks, lenders, and other companies may use different credit scores when they check your credit. And they could see different figures, depending on which credit score they use.

Fortunately it’s relatively straightforward to check your credit score without paying. That way, you can get an idea of what your credit score is and what lenders might see when they check your credit.

What Score Do Lenders Use?

Lenders can and do consider a variety of credit scores, depending on which scoring model works the best for their specific lending criteria. Unfortunately, it’s often difficult or even impossible to know which model a particular lender uses. However, the factors that impact your credit score generally hold true regardless of the credit score model used.

Understanding Various Credit Score Models

While most credit score models start with some of the same basic data, each one uses different information and weighs credit history information differently. This can mean that the different credit score models, such as FICO and VantageScore, come up with different credit scores, even for the same consumer.

Recommended: What Is the Starting Credit Score?

How Can You Check Your Credit Score?

Keep in mind that your credit score updates every 30 to 45 days, as new information comes rolling in from lenders. If you’re working on boosting your three-digit number, you may want to check on your progress every so often.

There are a few different ways that you can keep tabs on your credit score. You can sign up for a credit score monitoring service, which can provide regular credit score updates.

Another way is by using a spending app or credit card that provides access to your credit score as a feature or benefit. You may also have free access to it through your bank.

The Takeaway

FICO and Experian may be common names, but that’s where the similarities end. FICO is a widely used credit scoring model that creates a three-digit score based on reports provided by credit bureaus, including Experian. In addition to creating those detailed credit reports, Experian generates a credit score using data from FICO and another scoring model, VantageScore. Lenders may use both VantageScore and FICO when determining an individual’s creditworthiness.

Credit scoring models usually rely on a similar set of information, which means you can take the same actions to boost both scores. Making on-time payments, paying down what you owe, and diversifying your credit mix are all ways to help build up your credit score.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

See exactly how your money comes and goes at a glance.

FAQ

Is Experian or FICO more reliable?

Your VantageScore and your FICO Score are two different credit scores that use two different credit models. Both are considered to be reliable. But lenders may prefer to use one model over the other, depending on which one best fits their needs.

Why is my FICO Score different on Experian?

Though it does not have its own credit scoring model, Experian generates a score using data from VantageScore and FICO. FICO, on the other hand, creates its score using only its own calculations.

How close is your FICO Score to your credit score?

People have multiple credit scores. Your FICO Score is just one of them. Most credit scores use a similar set of data, which means credit scores usually vary by only a few points. If you spot a large discrepancy between your scores, take a look at your credit report and dispute any errors or inaccuracies you see.

Which credit score is most accurate?

No one credit score is considered more accurate than the others. Rather, different credit scores may provide lenders with different insights on spending or borrowing habits.

What is a good FICO Score?

FICO Scores are generally divided into five different categories, from Poor to Exceptional. A “good” FICO Score falls between 670 and 739. Having a FICO Score that is Very Good (740 to 799) or Exceptional (800 to 850) is even better.

Why is my FICO Score higher than my credit score?

Your FICO Score is just one of many credit scores that you may have. It may be higher or lower than other credit scores depending on the calculations used, including how the information in your credit report was weighed. As long as your various scores are within a few points of each other, there is usually no cause for alarm.

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Photo credit: iStock/Prostock-Studio

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .


Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Credit reports contain financial records of debts you owe and ones you’ve paid off. Positive information can remain on your credit reports indefinitely. Most negative information falls off your credit after seven years, though certain types of bankruptcy filings can remain longer.

Here’s a closer look at how financial records impact your credit reports.

How Long Do Inquiries Stay on a Credit Report?

When you apply for a loan, credit card, or line of credit the lender can perform what’s called a hard inquiry. This simply means that they pull copies of your credit reports, which they’ll use to make an approval decision.

Hard inquiries show up on a credit report and they’re included in your FICO® credit score calculations. Each new inquiry remains on your credit report for two years, according to FICO. However, they’re only considered in credit score calculations for the first 12 months.
Soft inquiries occur when you check your credit reports yourself or a company pulls your credit for the purposes of prequalifying or preapproving you for a loan. These inquiries won’t show up on a credit report, and they don’t have any impact on your credit score.

That distinction is important if you’re learning how to build credit.

Recommended: How Long Does It Take to Build Credit?

How Long Does Negative Information Remain on Your Credit Report?

Negative information on a credit report is any information that’s harmful to your credit score. What affects your credit score negatively? The list includes:

•   Late payments

•   Missed payments

•   Collection accounts

•   Charge-offs

•   Judgments

•   Foreclosures

•   Bankruptcies

Generally, negative information can stay on your credit report for up to seven years. Chapter 7 and Chapter 11 bankruptcy, however, can stick around on your credit report for 10 years.

In terms of how negative items impact your credit score, age matters, according to FICO. Newer negative items, such as collections or late payments, have a more immediate impact on your scores than negative items that are several years old. A money tracker app makes it easy to track your credit and your money in real time so you can get ahead financially.

How Long Does Positive Information Remain on Your Credit Report?

Positive information can remain on credit reports indefinitely. Credit bureaus are not required to remove this information, though they may do so at the seven-year mark. Examples of positive information that can stay on a credit report, regardless of time, include:

•   On-time payments

•   Open accounts that have a $0 balance or a low balance, relative to your credit limit

•   Closed accounts that you’ve paid in full

Positive items on a credit report are a good thing, since they help your credit scores. On-time payments and low balances on credit accounts have the biggest impact overall. Making biweekly payments or increasing your credit limits are two helpful ideas for how to lower credit utilization. Using a spending app to manage your budget and expenses can also help keep credit card balances low.

How to Remove Negative Information From Your Credit Report

Negative information that’s accurate cannot be removed from a credit report. For example, if you miss several payments on a loan but get caught up later, those late payments will stay on your credit reports until you hit the seven-year mark.

Inaccurate information, on the other hand, can be removed through the dispute process. Examples of inaccurate or incorrect items you could dispute on a credit report include:

•   On-time payments that were not properly attributed to your account

•   Credit accounts that don’t belong to you

•   Paid-in-full accounts that still show a balance on your credit reports

•   Account activity relating to fraudulent activity or identity theft

You’ll need to dispute the inaccurate information with the credit bureau that reports it. All three credit bureaus — Equifax, Experian, and TransUnion — allow you to initiate credit report disputes online. You’ll need to fill out a dispute form and provide some details about the dispute.

Once the credit bureau receives the dispute, it’s required to investigate your claim and return a decision to you promptly. If the credit bureau finds that there’s an error on your reports, it’s legally required to remove or update the information.

Your credit score updates monthly for the most part. Enrolling in credit score monitoring can make it easier to track changes, including changes to your score following a dispute.

Recommended: Why Did My Credit Score Drop After a Dispute?

Do You Still Have to Pay a Debt If It Fell Off Your Credit Report?

A debt can fall off your credit report if enough time passes. However, the amount owed doesn’t go away. Creditors and debt collectors could still attempt to get you to pay if the statute of limitations hasn’t passed.

The statute of limitations on debt allows creditors and debt collectors a set window of time in which to sue you for an unpaid balance. Each state determines how long the statute of limitations applies but in all states, its expiration doesn’t remove your legal obligation to pay what you owe.

Should you pay old debts? Ethically, yes. But if a debt falls off your credit report and the statute of limitations has expired, it would be very difficult for a creditor to force you to pay via a lawsuit.

The Takeaway

Reviewing your credit reports regularly is a good way to see what’s helping or hurting your score at any given time. If you have negative items on your credit report, you might see your score drop, but those points can come back with the passage of time.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

See exactly how your money comes and goes at a glance.

FAQ

What stays on a credit report forever?

Positive information can stay on a credit report forever, as credit bureaus are not required to remove any items that help your credit score. However, credit bureaus can choose to remove positive information after seven years.

Can credit information stay on my credit report for over 7 years?

Credit information can stay on your credit report for over seven years if it’s positive. Generally, negative information cannot stay on your report for more than seven years, unless you file for Chapter 7 or Chapter 11 bankruptcy. In that case, the bankruptcy filing could stay on your report for 10 years.

Do old accounts fall off a credit report?

Old accounts can fall off your credit report after seven years if they have negative information. Positive information from old accounts or newer ones can stay on your credit reports indefinitely.

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About the author

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Photo credit: iStock/PeopleImages
SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .


Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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FICO® Scores, issued by the Fair Isaac Corporation, are one of the most popular types of credit scores. FICO Scores were first introduced in 1989, and there are currently 16 distinct FICO versions in use today. FICO Score 8 and FICO Score 9 are two of the more popular versions (or models).

Keep reading to learn more on FICO Score 8 and FICO Score 9, including how each works, how they differ, and which score lenders use the most.

What Are FICO Scores?

A FICO Score is a type of credit score produced by the Fair Isaac Corporation. They list five factors that can affect your FICO score:

•   Payment history (35%)

•   Amounts owed (30%)

•   Length of credit history (15%)

•   Credit mix (10%)

•   New credit (10%)

Your FICO Score is a three-digit number that ranges from 300 to 850, and can help lenders decide how much of a credit risk you might be. Lowering your credit card utilization is one way that you may be able to build your credit score.

Recommended: 10 Strategies for Building Credit Over Time

Why There Are Different FICO Score Versions

While the Fair Isaac Corporation does share the broad information that makes up a FICO Score, they do not share exactly what goes into a FICO Score. The same is true of other companies that produce credit scores. When you look at VantageScore vs. FICO Scores, for example, you may find that the same person has varying scores, though they’re usually fairly close across all scoring companies.

FICO is constantly tweaking its model to make it as predictive as possible, which is why there are multiple FICO Score versions used.

How Different FICO Score Versions Are Used

Different FICO Score versions are used depending on the type of loan and the lender’s preferences. Here’s a breakdown:

FICO Score 8 (Most Common)

•   Widely used for credit card approvals, auto loans, and personal loans

•   Known for being sensitive to high credit card utilization

FICO Score 9 (Improved Model)

•   Used by some lenders for personal loans and credit cards

•   More lenient on medical debt and paid collection accounts

•   Incorporates rent payment history, if reported

FICO Score 2, 4, and 5 (Mortgage Scores)

•   Specifically used in mortgage lending

•   Required by Fannie Mae and Freddie Mac for home loans

•   Older models that focus heavily on payment history and derogatory marks

FICO Auto Score 8 & Auto Score 9

•   Tailored for auto loan approvals

•   Gives more weight to auto loan payment history

FICO Bankcard Score 8 & Bankcard Score 9

•   Used for credit card approvals

•   Score ranges from 250 to 900

•   Places more emphasis on credit card behavior and revolving credit usage

FICO Score 10 and 10T (Newest Versions)

•   Not yet widely adopted

•   FICO 10T incorporates trending data, which looks at credit usage patterns over time

•   More predictive and accurate, but lenders are slow to switch due to compatibility issues

Lenders choose specific versions based on the type of risk they want to assess and the industry standards they follow.

Key Features of FICO Score 8

FICO Score 8 is one of the most widely used credit scoring models by lenders to assess a borrower’s creditworthiness. It places a strong emphasis on payment history and credit utilization, with late payments and high credit card balances significantly impacting the score.

Additionally, FICO Score 8 does not differentiate between paid and unpaid collection accounts. This model is favored for its balanced approach to evaluating risk while helping lenders make more accurate lending decisions.

Key Features of FICO Score 9

FICO Score 9 introduces several enhancements over FICO Score 8, offering a more refined assessment of creditworthiness. It disregards paid collection accounts, which can positively impact borrowers who have settled past debts. Additionally, it reduces the negative impact of medical collections compared to other types of debt.

The model also incorporates rental payment history when reported, providing an opportunity for renters to build credit. These improvements aim to provide a fairer and more accurate reflection of a consumer’s financial behavior, helping lenders make better-informed decisions.

Which Do Lenders Use More: FICO Score 8 or FICO Score 9?

Lenders predominantly use FICO Score 8 for most credit decisions, as it’s the most widely adopted version of the FICO Score. FICO Score 9 is newer and includes some improvements. As of now, though, many lenders still rely on FICO Score 8 because it has been in use longer and has a more established track record.

Major Differences Between FICO Score 8 and FICO Score 9

FICO Score 8 and FICO Score 9 are two different models of the FICO Score credit score model. Here’s a look at the major differences between FICO Score 8 and FICO Score 9:

Medical Debt:

•   FICO Score 8: Treats medical debt the same as other types of debt, potentially lowering your score.

•   FICO Score 9: Excludes medical debt from the score if it’s paid off, making it less impactful once paid.

Collection Accounts:

•   FICO Score 8: Does not differentiate between types of collections, meaning both paid and unpaid collections can harm your score.

•   FICO Score 9: More lenient on paid collection accounts, which won’t negatively impact the score once they’re settled.

Rent Payment History:

•   FICO Score 8: Does not consider rent payments when calculating the score.

•   FICO Score 9: Includes rent payment history if it’s reported, which can benefit renters with a positive payment history.

Authorized User Accounts:

•   FICO Score 8: Considers authorized user accounts as part of the score, even if the primary account holder is not using the card responsibly.

•   FICO Score 9: De-emphasizes authorized user accounts to avoid inflating scores based on potentially inactive accounts.

Credit Utilization:

•   FICO Score 8: Focuses on credit utilization ratios, especially for credit cards, to assess creditworthiness.

•   FICO Score 9: Similar in its approach to credit utilization, but may calculate this slightly differently to reflect more accurate borrower behavior.

Overall, FICO Score 9 offers a more updated approach to certain types of debt and credit behaviors compared to FICO Score 8, but FICO Score 8 is still more commonly used.

How to Check Your FICO Scores

You have a few options to check your credit report and score, including ways to check your credit score without paying. Here are some ways to check your FICO Scores:

•   Check with your credit card issuer: Many credit card companies, like Discover and American Express, offer free FICO scores to customers.

•   Visit MyFICO.com: The official FICO website provides access to multiple score versions for a fee.

•   Use free credit monitoring services: Platforms like Experian offer free access to your FICO Score.

•   Contact your bank or credit union: Some banks and credit unions provide FICO scores as part of their customer benefits.

Recommended: Free Credit Score Monitoring with SoFi

The Takeaway

FICO scores, produced by the Fair Isaac Corporation, are one of the more popular types of credit scores used by 90% of lenders. FICO Score 8 and FICO Score 9 are two different versions of the FICO score model.

According to the Fair Isaac Corporation, FICO Score 8 is still the most widely used version of the FICO score, and FICO Score 9 is also still widely used by lenders, even though both models have been available for over a decade.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

See exactly how your money comes and goes at a glance.

FAQ

Is FICO 8 or FICO 9 better?

FICO 9 is considered an improvement over FICO 8, as it reduces the impact of medical debt, disregards paid collections, and includes rental payment history if reported. However, FICO 8 remains widely used by lenders, so its relevance depends on the lender’s preference and the borrower’s financial situation.

What is a good FICO 8 score?

A good FICO 8 score typically falls between 670 and 739. This range indicates that a borrower is considered low-risk by lenders, which can lead to better loan terms and interest rates. Scores above this range are considered very good or excellent, further enhancing borrowing opportunities and financial benefits.

Which FICO score is most important?

The different FICO score models are similar, and none is considered to be more important than any others. Different lenders may use different FICO score models depending on which model they find most advantageous for their purposes.

Is FICO score 8 still used?

Yes, even though FICO Score 8 was first introduced in 2009, it is still widely used in the lending industry. However, over time, lenders will likely start migrating to newer FICO scoring models, such as FICO Score 9, FICO Score 10, and FICO Score 10T.

Is a FICO score of 8 good to buy a house?

It is important to understand that FICO Score 8 refers to the eighth version of the FICO credit scoring model, and not to an actual FICO Score of 8. FICO scores have a minimum of 300, so it is impossible to have a FICO Score of 8. To buy a house with a mortgage, you will likely need to have a FICO Score in the good range (meaning a score of at least 670), though requirements vary by lender.

Do any lenders use FICO 9?

Yes, some lenders use FICO Score 9, especially for personal loans and certain types of credit evaluations. However, FICO Score 8 remains the most widely used version. FICO 9 enhances rental payment reporting and reduces the impact of medical debt, making it appealing for specific lending situations.

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Photo credit: iStock/milorad kravic

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.


Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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Understanding the differences between CreditWise and FICO® Score is essential for managing your credit health. While both tools provide insights into your creditworthiness, they use distinct scoring models and data sources.

FICO scores are produced by the Fair Isaac Corporation and are one of the most popular types of credit scores. CreditWise is a service provided by Capital One that provides you access to your TransUnion® credit report and your VantageScore® 3.0 credit score.

This article will explore how these scores are calculated, their impact on your financial decisions, and which one lenders prefer.

What Is a Credit Report?

Your credit report is a statement that has information about how well you have historically paid loans and used other types of credit. Most consumers have more than one credit report. This is because there are multiple companies that collect and maintain credit information about consumers.

Three of the largest credit reporting bureaus are Equifax®, Experian®, and TransUnion. Each of these credit bureaus collect information about consumers, and many consumers have credit reports from all three. Typically, credit scores are calculated using the information gathered from the three credit bureaus.

Recommended: How Long Does It Take to Build Credit?

How CreditWise Works

CreditWise, a free credit monitoring tool offered by Capital One, empowers users to track their credit health without affecting their credit score. By utilizing data from TransUnion and the VantageScore 3.0 model, CreditWise provides users with a clear snapshot of their credit status.

One of its standout features is the credit simulator, which allows users to explore how financial decisions — such as paying off debt or applying for a new credit card — could impact their score. CreditWise also sends real-time alerts for significant changes in credit activity, helping users detect potential fraud and stay informed about their credit profile.

How FICO Works

FICO, or the Fair Isaac Corporation, is a leading provider of credit scoring models widely used by lenders to assess creditworthiness. The FICO score is calculated using data from the three major credit bureaus — Experian, TransUnion, and Equifax — and evaluates factors such as payment history, credit utilization, length of credit history, new credit inquiries, and credit mix.

By analyzing these factors, FICO generates a score ranging from 300 to 850, helping lenders gauge the risk associated with lending money or extending credit to a borrower.

Recommended: 10 Strategies for Building Credit Over Time

Differences Between CreditWise vs. FICO

The primary difference between CreditWise and FICO lies in their scoring models and purpose. CreditWise uses the VantageScore 3.0 model, which analyzes credit data from TransUnion. It’s a free tool that helps consumers monitor their credit health.

On the other hand, FICO scores are the industry standard, used by over 90% of lenders to assess creditworthiness. FICO scores are based on data from all three major credit bureaus: Experian, TransUnion, and Equifax.

While CreditWise is great for tracking trends and identifying fraud, FICO scores play a crucial role in loan approvals and interest rate determinations.

Recommended: Differences Between VantageScore and FICO Credit Scores

How Credit Scores Are Calculated

Different companies calculate their credit scores in different ways, though most companies use similar information. As mentioned above, the Fair Isaac Corporation lists five factors that affect your FICO score:

•   Payment history (35%)

•   Amounts owed (30%)

•   Length of credit history (15%)

•   Credit mix (10%)

•   New credit (10%)

Paying your bills on time and lowering your credit card utilization are two common ways that you can build your credit score.

Why Are There Different Scores?

There are different credit scores because each scoring model uses unique algorithms to assess creditworthiness. Additionally, scores can vary depending on which credit bureau — Experian, TransUnion, or Equifax — provides the data. Each model weighs factors like payment history and credit utilization differently, leading to score variations.

Generally, though, different credit scores for the same person should be within a few points of each other.

How to Check Your Credit Score and Report

There are a few ways that you can check your credit score and your credit report. You may be able to access your credit score as a perk of certain credit cards that you may already have or spending apps that you subscribe to. You can get a copy of your credit report for free from each of the three major credit reporting bureaus at least once per year.

How to Access Your FICO Score and CreditWise Report

If you want to know your FICO score specifically, here’s how to check it:

•   Check through your bank or credit card issuer: Many financial institutions offer free FICO score access to customers.

•   Visit the official FICO website: Purchase your score directly from myFICO.com.

•   Use credit monitoring services: You can sign up for credit score monitoring. SoFi’s credit monitoring service allows you to track your credit score and receive weekly updates at no cost.

•   Check with credit counseling agencies: Some nonprofit agencies offer free credit score reviews.

•   Request a credit report: While not always included, some reports might show your FICO score.

Here’s how you can access your CreditWise report:

•   Download the CreditWise app: Available on iOS and Android devices for easy access.

•   Visit the CreditWise website: Access the report directly at www.CreditWise.com.

•   Sign up through Capital One: CreditWise is free for Capital One customers, but others can also access it.

•   Use the Capital One mobile app: Check your credit score and report from the app if you’re a Capital One customer.

•   Monitor credit activity regularly: Track changes in your credit score and report updates over time.

The Takeaway

There are many companies that produce credit scores, and each credit score uses different information and a different model.

FICO credit scores are produced by the Fair Isaac Corporation, and are one of the most popular types of credit scores. CreditWise is a service provided by Capital One, and provides access to your VantageScore credit score. These two types of credit scores are different, though generally your scores should fall in the same range.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

See exactly how your money comes and goes at a glance.

FAQ

How close/accurate is CreditWise?

CreditWise is a service provided by Capital One to its customers, and it provides access to your credit report, credit score monitoring, and your VantageScore credit score. VantageScore is considered a valid credit score, and while it is not the same as a FICO credit score, it should generally be within a few points of FICO and other credit scores.

Why is my FICO score lower than my CreditWise score?

Your FICO score may be lower than your CreditWise score because they use different scoring models. FICO considers factors like payment history and credit utilization, while CreditWise uses the VantageScore model, which weighs credit behavior differently. Additionally, each service may access data from different credit bureaus, leading to score variations.

Is CreditWise your real credit score?

CreditWise provides a VantageScore 3.0 based on data from TransUnion, which is a legitimate credit score but not the same as a FICO score, which most lenders use. While helpful for monitoring credit health, it may not be the exact score lenders reference when making lending decisions.

What’s more accurate, CreditWise or FICO?

FICO scores are considered more accurate for lending decisions, as they are used by the majority of lenders to assess creditworthiness. CreditWise, which provides a VantageScore 3.0, is helpful for monitoring credit health but may differ from the score lenders rely on when evaluating loan applications.

Which score is closest to FICO?

VantageScore is the closest alternative to FICO, as both use similar credit data from the major bureaus — Experian, Equifax, and TransUnion. However, their scoring models differ slightly. FICO scores range from 300 to 850, while VantageScore also falls within this range but weighs factors like payment history and credit utilization differently.

What is a good CreditWise score?

A good CreditWise score typically falls within the range of 670 to 739 on the VantageScore 3.0 scale, which ranges from 300 to 850. Scores in this range indicate responsible credit management and make it easier to qualify for loans, credit cards, and favorable interest rates.

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Photo credit: iStock/Delmaine Donson

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.


Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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