FICO score
A FICO score is a widely used three digit credit score, typically ranging from 300 to 850, that summarizes how likely a borrower is to repay.
FICO is a credit scoring model created by the Fair Isaac Corporation and used by many lenders to gauge credit risk. The general consumer FICO score runs from 300 to 850, and it is calculated from your payment history, how much you owe, the length of your credit history, your mix of credit types, and recent applications for new credit. Payment history and amounts owed carry the most weight. As a rough guide, many lenders treat scores in the mid 600s and up as solid, with higher bands generally seen as stronger, though every lender sets its own cutoffs.
For small business financing, lenders frequently pull the owner's personal FICO score, particularly for younger companies that lack much business credit. A higher score can widen your options and help you qualify for lower rates, while a lower score may limit you to financing that costs more or asks for collateral. To improve your score over time, pay every bill on time, keep credit card balances low relative to your limits, avoid opening many new accounts at once, and review your reports for mistakes you can dispute.
Common questions
What FICO score do I need for a business loan?
There is no single cutoff. Many lenders look for scores in the mid 600s or higher for stronger terms, while some financing is available with lower scores at a higher cost. Each lender sets its own standard.
Is a FICO score the same as a credit score?
FICO is one brand of credit score and the most commonly used, but other models like VantageScore exist too. People often use the terms loosely to mean the same thing.
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