Definition
A number between 300-850 that depicts a consumer's creditworthiness. The higher the score, the better a borrower looks to potential lenders.
In depth
A credit score is a three-digit number (typically 300–850) that summarizes your creditworthiness — how likely you are to repay borrowed money based on your historical behavior with credit. Lenders, landlords, insurance companies, and sometimes employers use credit scores to evaluate financial risk and set terms.
The most widely used scoring model in the US is FICO, developed by Fair Isaac Corporation. VantageScore is a competing model jointly developed by the three major credit bureaus (Equifax, Experian, TransUnion). Both use the 300–850 range and similar underlying data, though weighting differs between models.
Your FICO score is calculated from five factors with the following approximate weightings: payment history (35%) — whether you pay bills on time; amounts owed / credit utilization (30%) — what percentage of available credit you're using; length of credit history (15%) — how long your accounts have been open; new credit (10%) — recent applications and hard inquiries; and credit mix (10%) — diversity of account types (revolving, installment, mortgage).
Score impact on your financial life is substantial. Score ranges: 300–579 (Poor), 580–669 (Fair), 670–739 (Good), 740–799 (Very Good), 800–850 (Exceptional). The difference between a 620 and 760 FICO score on a $400,000 30-year mortgage can mean a 1.5–2% higher interest rate — translating to over $100,000 more in total interest paid. By law, you're entitled to one free credit report annually from each bureau at AnnualCreditReport.com.
Frequently asked questions
How do I improve my credit score?
The highest-impact steps: pay every bill on time every month (payment history is 35% of your score — one missed payment can drop your score 50–100 points), reduce credit card balances to below 30% of your credit limit (ideally below 10%), avoid closing old accounts (length of history matters), and don't apply for multiple new credit accounts in a short period. Authorized user status on a family member's long-established card can also build credit.
How long does negative information stay on my credit report?
Most negative items — late payments, collections, charge-offs — remain for 7 years from the date of first delinquency. Chapter 13 bankruptcy stays for 7 years; Chapter 7 for 10 years. Hard inquiries from loan applications fall off after 2 years. Consistent on-time payment behavior after a delinquency gradually dilutes its impact on your score over time.
Does checking my own credit score hurt it?
No. Checking your own score is a 'soft inquiry' with zero impact on your score. Only 'hard inquiries' — when a lender pulls your credit report for a loan or credit card application — can temporarily lower your score by 5–10 points. Rate shopping for the same loan type (mortgage, auto) within a 14–45 day window is typically counted as a single hard inquiry by scoring models.
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