Learn About Credit Scores

Learn About Credit Scores

A credit score in the United States is a number representing the creditworthiness of a person and the likelihood that person will pay his or her debts. Lenders such as banks and credit card companies use credit scores to evaluate the potential risk posed by lending money to consumers. Widespread use of credit scores has made credit more widely available and less expensive for many consumers. Your score can affect whether or not you are approved as well as what interest rate you are charged. A good credit score is generally considered to be 700 or higher but this can fluctuate depending on the scoring model used. The problem is there are different scoring models so your score can vary several points depending on whose model is used and what type of company (Department store? Car dealership? Bank?) is making the request.

Credit Scoring Models

Here are the main credit scoring models:

  • FICO score
  • VantageScore
  • CE Score
  • Other credit scores

The FICO model is used by the vast majority of banks and credit grantors, and is based on consumer credit files of the three national credit bureaus: Experian, Equifax, and TransUnion. Because a consumer’s credit file may contain different information at each of the bureaus, FICO scores can vary depending on which bureau provides the information to FICO to generate the score.

To learn more about FICO Scores, click the links on the left of this page.