Glossary
Credit score
A credit score is a number, usually from 300 to 850, that summarizes your credit report to predict how likely you are to repay; lenders use it to decide whether to approve you and at what rate.
FICO and VantageScore are the two main models. FICO weighs payment history most, then amounts owed (including utilization), length of credit history, new credit and credit mix.
You can get your credit reports free from each bureau at AnnualCreditReport.com; many cards and banks show a score free.
Work it out
Related terms
- Credit utilizationThe share of your credit card limits you are using, overall and on each card; lower is better for credit scores, and under 30% (ideally under 10%) is the usual guidance.
- Hard inquiryA lender checking your credit report after you apply for credit; it can lower a score by a few points and stays on your report for two years, while soft inquiries don't affect scores.
- Secured credit cardBacked by a refundable deposit, usually equal to its limit, so people with no or damaged credit can get approved and build a history with on-time payments.
Sources: myFICO: What's in my FICO scores · CFPB: Credit reports and scores