Credit Report Scoring

Credit report scores are often used by lenders as a predictor of how likely you are to repay your loans. A credit score is generated by a mathematical formula utilizing the data from your TransUnion, Equifax or Experian credit reports. Lenders have been using credit report scoring as part of lending decisions for more than 20 years.

Various factors affect credit scores, including the following:

Your credit report score can be an important indicator of your financial health. Lenders may use your credit score to determine:

While your credit score is frequently used in assessing your creditworthiness, lenders also examine the information on your credit reports and your loan application. Regularly checking your credit reports enables you to:

There are many types of credit report scores that rely on different mathematic algorithms and predict different behaviors, such as the probability of delinquency or default. Under many credit scoring models, the higher the numeric score, the better. Each lender decides what credit scoring model(s) it will use, and what range it considers to be a good credit risk or a poor credit risk. For this reason, the lender is the best source to explain what your credit score means in relation to the final credit decision. After all, each lender or creditor determines the criteria used to extend credit. The credit score is only one component of information evaluated by lenders.