Why everyone should know their FICO credit score — and how often to check it

Your credit score is a key part of your financial life, but it can be confusing. Two scoring model companies, VantageScore and FICO, provide the majority of credit scores to lenders.

It's a good idea to keep track of your scores with both companies, but FICO is the more important of the two. Below, CNBC Select reviews why it's important to know your current FICO score, what the scores mean and how to get your score for free.

Your credit score impacts whether you'll get approved for a credit card, mortgage and other financial products. It can also be a consideration when you're trying to get an apartment or even applying for a job.

Though FICO and VantageScore consider similar data, their formulas are somewhat different and the credit score each generates for you will likely vary. FICO says its scores are used in 90% of lending decisions in the U.S, so knowing your FICO score will give you a better idea of whether you'll qualify for a loan or line of credit.

If you have a credit history, you actually have dozens of different FICO scores, which vary depending on what financial product you are trying to get approved for. A mortgage company may use FICO Score 5, which ranks aspects of your credit history differently than FICO Score 8, most often used by credit card issuers.

Here are the most common FICO score versions and what they're used for:

• Credit card companies: FICO Score 3 and 9; FICO Bankcard Scores 2, 4, 5, 8 and 9
• Auto lenders: FICO Auto Scores 2, 4, 5, 8 and 9
• Mortgage lenders: FICO Scores 2, 4 and 5
• Newer versions: FICO Score 10, FICO Score 10 T, FICO Auto Score 10, FICO Bankcard Score 10

FICO 8, the most widely used version, offers a broad overview of your credit. It is a number between 300 and 850, calculated using five key metrics.

1. Payment history (35%): Whether you've paid debts on time
2. Amounts owed (30%): The amount of credit you're using compared to your total credit limit, also known as your credit utilization rate
3. Length of credit history (15%): The amount of time you've had credit
4. New credit (10%): How often you've applied for and opened a new account
5. Credit mix (10%): The variety of credit products you have, including credit cards, installment loans and mortgages.

Other versions of FICO also range between 300 and 850, but weigh the metrics differently.

When checking your FICO score, it's important to know where you fall within the different scoring ranges. Those in the "good" to "exceptional" ranges have better odds of approval and get offered the lowest interest rates.

Below are the five FICO score ranges:

1. Poor: 300 to 579
2. Fair: 580 to 669
3. Good: 670 to 739
4. Very good: 740 to 799
5. Exceptional: 800 to 850

Your FICO score changes when information on your credit report gets updated, which varies from person to person. Generally, however, you can expect an update at least once a month (more often if you have multiple credit products under your name).

So, it's a good idea to check your score with all three reporting agencies at least once a month. Most credit monitoring services send updated scores and alert customers about unusual activity.

Experian IdentityWorks℠ Premium reviews data from all three credit bureaus and provide regular updates on your basic FICO score from each. It also informs you about score changes, new inquiries, changes to your personal information and suspicious activity.

The advanced version of MyFICO® includes numerous FICO scores, as well as access to $1 million in identity theft insurance and 24-hour expert help if your identity is compromised.

Most banks and credit card companies provide cardholders with a free credit score at least once a year. Make sure your institution uses FICO, though, and not VantageScore or another model.

In addition to linking phone, utility and streaming service payments to your Experian credit report, *Experian Boost™ provides regular updates on your Experian FICO score.

You can get a free copy of your credit report from each of the three major consumer reporting companies by visiting AnnualCreditReport.com. These reports do not include credit scores, but reviewing the information on them can bring to light any errors that are hurting your score.

Your FICO credit score influences whether or not you'll get approved for loans and lines of credit. Knowing your score will save you time when applying for a mortgage, credit card or car loan — and enable you to work addressing in your credit history.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every personal finance article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of financial products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.

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*Results may vary. Some may not see improved scores or approval odds. Not all lenders use Experian credit files, and not all lenders use scores impacted by Experian Boost.