What Is a Credit Score?
In plain English
A credit score is a three-digit number, typically ranging from 300 to 850, that represents how likely you are to repay borrowed money. It is calculated from your credit report data and used by lenders, landlords, and insurers to evaluate financial risk.
How Is a Credit Score Calculated?
Credit scores are calculated using five main factors: payment history (35%), amounts owed or credit utilization (30%), length of credit history (15%), credit mix (10%), and new credit inquiries (10%). Payment history and utilization carry the most weight, so consistently paying on time and keeping balances low are the most effective ways to build a strong score.
What Is Considered a Good Credit Score?
Score ranges vary by model, but for FICO scores: 800–850 is exceptional, 740–799 is very good, 670–739 is good, 580–669 is fair, and below 580 is poor. A score above 670 typically qualifies you for competitive loan rates. Lenders set their own thresholds, so requirements differ by product and institution.
How Can You Improve Your Credit Score?
The fastest improvements come from paying every bill on time and reducing your credit card balances to below 30% of your limit. Avoid closing old accounts unnecessarily, limit hard inquiries, and regularly check your credit report for errors. Building good habits consistently over time is more effective than any quick fix.
Frequently asked questions
How often does my credit score change?
Your credit score can change whenever your lenders report new information to the credit bureaus, which typically happens monthly. Significant events like a missed payment or a large new balance can cause noticeable shifts. Monitoring your score regularly helps you catch changes early.
Does checking my own credit score lower it?
No. Checking your own score is a soft inquiry and has no impact on your credit. Only hard inquiries — initiated by lenders when you apply for credit — can temporarily lower your score by a few points.
Is there only one credit score?
No. There are dozens of credit scoring models, including multiple FICO versions and VantageScore. Each lender may pull a different score from a different bureau, so the number you see can vary slightly depending on the source.
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Related terms
Credit Report
A credit report is a detailed record of your borrowing and repayment history compiled by credit bureaus. It is the source data used to calculate your credit score.
FICO Score
A FICO score is the most widely used credit scoring model, developed by Fair Isaac Corporation. Scores range from 300 to 850, with most lenders relying on FICO to make credit decisions.
VantageScore
VantageScore is a credit scoring model created jointly by the three major credit bureaus as an alternative to FICO. It uses the same 300–850 scale and similar factors.
Credit Utilization
Credit utilization is the percentage of your available revolving credit that you are currently using. It is one of the most influential factors in your credit score.
Payment History
Payment history is a record of whether you have paid your credit accounts on time. It is the single most important factor in your credit score, accounting for 35% of your FICO score.
Credit Mix
Credit mix refers to the variety of credit account types in your credit history, including credit cards, installment loans, mortgages, and auto loans. It accounts for 10% of your FICO score.
Credit Age
Credit age, or length of credit history, refers to how long your credit accounts have been open. Older accounts and a higher average age generally help your credit score.
Hard Inquiry
A hard inquiry occurs when a lender checks your credit report as part of a credit application. It can temporarily lower your credit score by a few points.