What is a credit score?

Home Forums Credit Reports & Scores What is a credit score?

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    Team StellarFi

    A credit score is a three-digit rating that is calculated based on the information in your credit reports, generally provided by three major credit bureaus: Equifax®, TransUnion®, and Experian®. The number is usually anywhere between 300-850.

    Your credit score is calculated based on many factors like your payment history, current unpaid debt, length of your credit history, types of credit accounts, recent activity, percentage of credit used from the available credit, and type of debt when it began.

    Lenders (banks, credit card companies, etc.) can determine your creditworthiness – how likely you are to be able to repay loans on time –through your credit scores.

    Based on your credit scores, banks decide whether you qualify for a loan and what the interest rates should be. Credit card companies use your credit score to decide the credit limit on your credit card.

    There are multiple credit scores and they can vary depending on the bureau that calculates your credit score. The two most important credit scores, or rather, credit scoring models are FICO® and VantageScore®.

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StellarFinance, Inc. and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

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