Credit Score

The phrase credit score describes a method of measuring credit worthiness by assigning a numerical value to a group of qualities used to make credit related decisions.This information is drawn from a variety of sources, including credit reports and public records. The resulting numbers are then used in the creation of credit report scores.

The Fair Isaac Company created the system that is most commonly used for this purpose, which is why credit report scores are often referred to as FICO scores. Although there are several companies that do credit scoring, most lenders use the Beacon FICO score.

Credit scores generally range between 300 and 900. A low credit report score can affect a consumer’s ability to get a loan or mortgage. It can influence the rate of interest a consumer is subject to in financial dealings.

It can also effect transactions that seem, on the surface, to be unrelated to credit matters. A prime example of this is found in the use of credit report information used by employers in hiring practices.