A credit score is a three-digit number, typically ranging from , that summarizes your creditworthiness. It acts as a "financial report card," telling lenders how likely you are to repay debt on time. 1. How Credit Scores Are Calculated
: Your record of making on-time payments. This is the most influential factor. credit scores explained
: Also known as credit utilization . It compares how much you owe to your total available credit limit. Lower percentages (ideally under 30%) are better. A credit score is a three-digit number, typically
Higher scores suggest you are a lower risk to lenders, often leading to better interest rates and loan terms. While ranges vary by model, a general breakdown includes: : Exceptional 740–799 : Very Good 670–739 : Good 580–669 : Fair 300–579 : Poor 3. The Three Major Bureaus A guide to understanding your credit score How Credit Scores Are Calculated : Your record
: Having a variety of account types, such as credit cards and installment loans (car loans or mortgages), can improve your score.