Credit Scores

A single three-digit number that can quietly shape the interest rate on your mortgage, your car loan, and sometimes even your apartment application.

Cheat Sheet

A credit score is a three-digit number, typically ranging from 300-850, summarizing how risky a lender considers you based on your credit history.
The most widely used scoring model, FICO, weighs five main factors: payment history, amounts owed, length of credit history, new credit, and credit mix.
Payment history — whether you've paid bills on time — is typically the single largest factor in most credit scoring models, often weighted more heavily than any other category.
Credit utilization, the percentage of your available credit you're actually using, is another major factor — keeping utilization low is generally associated with a healthier score.
You're entitled to a free copy of your credit report from each major credit bureau (Equifax, Experian, TransUnion) at least once a year in the US, separate from your actual numerical score.
A good credit score can meaningfully lower interest rates on loans, credit cards, and even affect apartment rental applications and some insurance premiums.

The 60-Second Version

A credit score is a three-digit number, typically ranging from 300-850, summarizing how risky a lender considers you based on your credit history. The most widely used scoring model, FICO, weighs five main factors: payment history, amounts owed, length of credit history, new credit, and credit mix. Payment history, whether you've paid bills on time, is typically the single largest factor in most credit scoring models, often weighted more heavily than any other category. Credit utilization, the percentage of your available credit you're actually using, is another major factor, with lower utilization generally associated with a healthier score. You're entitled to a free copy of your credit report from each major credit bureau, Equifax, Experian, and TransUnion, at least once a year in the US, separate from your actual numerical score. A good credit score can meaningfully lower interest rates on loans, credit cards, and even affect apartment rental applications and some insurance premiums.

The Long Version

What a Credit Score Actually Measures

A credit score is a numerical summary designed to predict how likely someone is to repay borrowed money reliably, based on their past credit behavior. Lenders use this score as a quick, standardized way to assess risk before extending credit, rather than manually reviewing an applicant's entire financial history each time.

The Five Factors, Ranked by Weight

The most widely used FICO model breaks credit scoring into five weighted categories: payment history (whether bills have been paid on time), amounts owed (including credit utilization), length of credit history, new credit (recent applications and accounts), and credit mix (the variety of credit types held). Payment history and amounts owed together typically account for the large majority of a FICO score's weight, making consistent on-time payments and low credit utilization the two most impactful habits for most people.

Credit Reports vs. Credit Scores

A credit report is the detailed underlying record of an individual's credit accounts, payment history, and any negative marks, maintained separately by each of the three major credit bureaus, Equifax, Experian, and TransUnion. A credit score is a calculated summary derived from that report. Because report details can differ slightly between bureaus, scores can also vary somewhat depending on which bureau's data is used, which is why checking all three reports periodically is generally recommended.

Why It Follows You Into Surprising Places

Beyond obvious uses like loan and credit card approval, credit scores or the underlying credit history can influence a surprising range of other decisions: landlords frequently check credit history as part of rental applications, some employers review credit reports (though not the score itself) during hiring for certain roles, and some insurers factor credit-based information into calculating premiums in certain states.

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Glossary

FICO score: The most widely used credit scoring model in the US, ranging from 300 to 850.
Credit utilization: The percentage of available credit currently being used, a major factor in credit scoring.
Credit bureau: An organization, such as Equifax, Experian, or TransUnion, that collects and reports consumer credit information.
Hard inquiry: A credit check triggered by applying for new credit, which can temporarily and slightly lower a credit score.
Credit mix: The variety of credit account types, such as credit cards, loans, and mortgages, a person holds, a minor factor in credit scoring.