What is my credit score?

Answer: A credit score predicts how likely you are to pay back a loan on time. A scoring model uses information from your credit report to create your credit score.

Your credit score starts with the information about you from your credit report. A mathematical formula – called a scoring model – is then used to create your credit score.

Credit scores are used by companies to make decisions such as whether to approve a mortgage at a certain rate or issue a credit card. Different lenders use different scoring formulas, so your score can vary from lender to lender. Usually a higher score makes it easier to qualify for a loan and may result in a better interest rate. Most scores range from 300-850.

Warning:

There is no “one” credit score-there are many credit scoring formulas available to you as a consumer as well as to lenders, and the score will also depend on the data used to calculate it.

Tip:

You can read the CFPB’s report on the differences between the credit scores available to you and the credit scores sold to lenders.

Tip

To get and keep a good credit score

  • Pay all your bills on time
  • Only apply for the credit that you need
  • Don’t use too much of the credit that is available to you
  • Order your credit report every year and dispute any errors you find

Tip:

If you have a problem with credit reporting, you can submit a complaint with the CFPB online.

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