The FICO Score algorithm is patent-protected by Fair Isaac Corporation under many many many patents, some more recent than others. As such, it is considered a proprietary trade secret.
Based on thousands of data points gathered by this website, we’ve worked to analyze how the FICO score is affected by a great number of variables. Please feel free to share this link and also to provide your own data points by becoming a member of this social network.
FICO Score 8 Algorithm
FICO Score 8, also called FICO08 or FICO8, is the most popular FICO Score “flavor” as of late 2017. There are many, many flavors of FICO scores, but this article will focus on FICO Score 8.
The FICO Score 8 algorithm is always “fresh” meaning that every time you or a lender pulls your FICO Score 8, it is based on the most recent data pulled from your credit reports. Your FICO Score 8 can change day to day based on your creditors reporting new information to your reports.
Each credit reporting agency has their own variances within FICO Score 8, so even if they all report 100% identical information, your score may differ from bureau to bureau.
The range of FICO Score 8 starts at 300 (lowest score) and goes up to 850 (highest score). In fact, the actual FICO Score 8 can go over 850 points, but you can only see up to 850. This is because some people with extremely excellent credit have some “headroom” about 850 so that they can still have some areas of their reports that aren’t 100% perfect, but they’ll still show an 850 score.
FICO Score 8 Categories
FICO Score 8 has 6 categories that are used to calculate the freshest score. Each category has its own range of points that are added to and subtracted from based on a person’s profile.
Category A, Baseline Points: This is the baseline points that everyone gets just for breathing, but if you don’t have an account older than 6 months, you get NO score at all. You must have an account 6 months or older for FICO to rate you. The baseline points that every gets are 300 points. Out of the maximum 850 points for FICO Score 8, 550 points are granted for the other 5 categories.
Category B, Payment History: The payment history is the most important part of FICO scoring, accounting for 35% of your remaining 550 point range. That is 192.5 FICO points, but our research shows there are actually 200 available FICO points for payment history.
Category C, Amounts Owed: The amounts owed is the second most important part of FICO scoring, accounting for 30% of your remaining 550 point range. That is 165 FICO points, but our research shows there is a bit of headroom in this category so in reality there may be as many as 175 FICO points available here for people with extremely positive credit.
Category D, Length of Credit History: The length of credit history counts for 15% of remaining FICO points, or 82.5 FICO points, but our research shows this is actually 90 FICO points. While this may not seem like a lot, this section is the reason some folks have perfect credit history but are limited to 770 or 780 FICO Score 8.
Category E, Types of Credit: This FICO category is also called “Credit Mix” on some forums. This category accounts for 10% of your FICO score, or 55 points. We believe this is closer to 60 FICO points with the extra headroom.
Category F, New Credit: This section actually gives points for NOT having new credit. It accounts for 10% of your FICO score, or 55 points, but our research says this is actually 60 FICO points.
If you add all 6 categories up, you get 850 points but if you also include the extra headroom for people with perfect category points, you’re actually at 885 possible FICO points. Anyone with a FICO headroom score of over 850 is rounded down to 850 but can have a category with less than perfect points and still be at 850.