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What is a credit score?
A credit score is a number that summarizes your
credit risk, based on a snapshot of your credit report
at a particular point in time. A
credit score helps lenders evaluate
your credit report and estimate
your credit risk.
The most widely used credit
scores are FICO® scores, the
credit scores created by Fair Isaac
Corporation. Lenders can buy
FICO® scores from all three major
credit reporting agencies. Lenders use FICO®
scores to help them make billions of credit decisions
every year. Fair Isaac develops FICO® scores based
solely on information in consumer credit reports
maintained at the credit reporting agencies.
Your credit score influences the credit that’s available
to you and the terms (interest rate, etc.) that lenders
offer you. It’s a vital part of your credit health.
This booklet can help you understand how credit
scoring works. Understanding your FICO® score can
help you manage your credit health. By knowing
how your credit risk is evaluated, you can take
actions that may lower your credit risk—and thus
raise your credit score—over time. A better FICO®
score means better financial options for you.
More information on FICO® scores
and credit scoring can be found online
at www.myfico.com/crediteducation.