Lesson 1 · About 7 minutes
What Is a Credit Score?
A credit score is a number created by a scoring model. It uses information from a credit report to predict how likely a person is to repay borrowed money as agreed.
What a score does not measure
- It does not measure your value as a person.
- It does not show every part of your financial life.
- It does not guarantee that an application will be approved or denied.
- It is not one permanent number that follows you unchanged.
Why scores can be different
A score may use information from Equifax, Experian, or TransUnion. The reports may not contain exactly the same accounts.
Companies use different scoring formulas and versions for different kinds of decisions.
Balances and account information change, so a score can change as report information is updated.
Where a score may matter
Lenders may use credit reports and scores when deciding whether to offer credit and what terms or interest rate to offer. Reports may also be used in certain housing, insurance, utility, and employment decisions—but the rules and information used can differ.