What’s your number? Credit Score Basics
As helpful as it is to you and potential lenders to read through your detailed credit reports, time is of the essence and there’s a need for a faster way to summarize your credit history. Introducing your credit score. A credit score is a number that summarizes your credit risk. The score is based on a snapshot of your credit reports at one of the three major consumer reporting agencies (Equifax, Experian, and TransUnion) at a particular point in time. This helps lenders evaluate your credit risk. Your credit score influences the credit that’s available to you and the terms, such as interest rate, that lenders offer you.
The credit scores most widely used in lending decisions are FICO® Scores, the credit scores created by Fair Isaac Corporation (FICO). A good FICO® Score means better financial options for you.
What’s a good number?
800 or Higher - Demonstrates to lenders that the consumer is an exceptional borrower
740 to 799 - Demonstrates to lenders that the consumer is a very dependable borrower
670 to 739 - Considered by most lenders to be good scores
580 to 669 - Some lenders will approve credit applications within this score range
Lower than 580 - Demonstrates to lenders that the consumer is a very risky borrower
How’s my number calculated?
1. Percent of On-Time Payments (35%) - This is a heavily weighted factor in calculating a credit score, so just one or two late payments c