What is Your Credit Score?

About Credit Scores

When you apply for credit - whether for a credit card, a car loan, or a mortgage - lenders want to know what risk they’d take by loaning money to you. Credit bureau scores are often called “FICO scores” because most credit bureau scores used in the U.S. are produced from software developed by Fair Isaac and Company. FICO scores are provided to lenders by the major credit reporting agencies.

You have three FICO scores, one for each of the three credit bureaus: Experian, TransUnion, and Equifax. Your three FICO scores affect both how much and what loan terms (interest rate, etc.) lenders will offer you at any given time. Taking steps to improve your FICO scores can help you qualify for better rates from lenders.

FICO scores provide the best guide to future risk based solely on credit report data. The higher the credit score, the lower the risk. While many lenders use FICO scores to help them make lending decisions, each lender has its own strategy, including the level of risk it finds acceptable for a given credit product. There is no single “cutoff score” used by all lenders and there are many additional factors that lenders use to determine your actual interest rates.

The law requires the major nationwide consumer reporting companies — Experian, TransUnion, and Equifax — to give you a free copy of your credit report each year if you ask for it. Get your FREE Annual Credit Report or call 1-877-322-8228, a service created by these three companies, to obtain your free credit report each year.

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