Which score is commonly used by lenders to evaluate a borrower's creditworthiness?

The FICO score is a widely recognized scoring model developed by the Fair Isaac Corporation, which lenders commonly use to evaluate a borrower's creditworthiness. This three-digit score typically ranges from 300 to 850 and takes into account several factors, including payment history, amounts owed, length of credit history, new credit, and types of credit used. Since many lenders rely on this standardized score, it serves as a critical tool in assessing the likelihood of repayment and default risk, ultimately influencing lending decisions.

While there are other credit scoring models available, such as VantageScore and Beacon score, the FICO score remains the most prevalent in the lending industry. Additionally, credit utilization is a component of the FICO score rather than a standalone scoring system, thus making it less relevant as an independent metric for assessing creditworthiness. Therefore, the FICO score stands as the primary method by which lenders evaluate borrowers.