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Your credit score is a number, calculated based on information in your credit report, that lenders use to assess the credit risk you pose and the interest rate they will offer you if they agree to lend you money.
Most lenders use credit scores rather than credit reports since the scores reduce extensive, detailed information about your financial history to a single number.
There are actually two competing credit scoring systems, FICO, which has been the standard, and VantageScore, which was developed by the three major credit bureaus.
Their formulas give different weights to particular types of credit-related behavior, though both put the most emphasis on paying your bills on time. They also have different scoring systems, ranging from 300 to 850 for FICO to 501 to 999 for AdvantageScore. The best - or lowest - interest rates go to applicants with the highest scores.
Because your credit score and credit report are based on the same information, it's very unlikely that they will tell a different story. It's smart to check your credit report at least once a year, which you can do for free at www.annualcreditreport.com or by calling 877-322-8228.
It may be a good idea to review your score if you anticipate applying for a major loan, such as a mortgage, in the next six months to a year. That allows time to bring your score up if you fear it's too low.Yahoo Finance - Cite This Source - This Definition
A number, roughly between 300 and 800, measuring an individual's credit worthiness. The most well-known type of credit score is the FICO® score. This score is derived from a mathematical formula that assigns numerical values to various pieces of information in your credit report. The score of 800 is the best rating you can receive. Financial institutions may use a credit score to help determine whether you qualify for a particular credit card, loan, or service.National Credit Union Administration - Cite This Source - This Definition
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Credit scores are numerical summaries of your credit-worthiness based on information from credit bureaus. Private companies provide consumer scores to creditors for a fee.State of Maine, Department of Professional and Financial Regulation - Cite This Source - This Definition
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- A number that summarizes your credit record and history. The score is based on several factors, including whether you pay your bills on time, your current level of debt, the types of credit and loans you have, and the length of your credit history. Lenders and insurers use your credit score and information from credit reports to set loan and insurance rates. Board of Governors of the Federal Reserve System - Cite This Source - This Definition
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