Credit Score

A Credit Score is a numerical value that summarizes all of the information appearing on your credit report.  Credit scores allow creditors to quickly determine the lending terms that apply to each individual.  For example, a poor credit score might result in a utility requiring a deposit prior to establishing an account.  A credit score might also be used by a more traditional lending institution, such as a bank, to determine the interest rate charged on a loan.

Generally, a credit score is based on:

• Loan payment history
• Outstanding loan balances
• Credit history
• Variety of credit in use

There are three major credit reporting agencies: Equifax, TransUnion, and Experian.  Each agency will have a slightly different method for determining a numerical credit score.