What is a credit score?

September 25, 2014 | By Greg Fisher, creditscoring.com

Credit reporting industry definitions

Consumer reporting agencies

Experian

• Experian.com
  
  
  • "A credit score is a number lenders use to help them decide how likely it is that they will be repaid on time if they give a person a loan or a credit card."
  
  
  • "A credit score is a summary of the information in a credit report at the moment it is reviewed."
  
  
  • "Credit scores represents[SIC] your creditworthiness and indicate the likelihood that you will repay a debt as agreed."
  
  
  • "Credit scoring is a tool lenders use to analyze the information in a credit report to help them make lending decisions."
• FreeCreditReport.com [See the band]
  
  
  • "A credit score summarizes your credit history into a number that lets lenders and others quickly know how responsible you have been with your past credit accounts and loans."
  
  
  • "A credit score is a number that reflects your credit risk level, typically with a higher number indicating lower risk."
  
  

  • "A credit score is a number that is generated through the use of statistical models using elements from your credit report."

• CreditMatters.com
  
  
  • "Simply put, credit scoring is a method of assessing the credit risk of a loan applicant. It uses mathematical models to evaluate a person's credit worthiness based on their credit history and current credit accounts."
  
  
  • "A credit risk score is a statistical summary of the information contained in a consumer's credit report. The most well known type of credit risk score is the Fair, Isaac or FICO score. Sophisticated mathematical processes calculate the score by assigning numerical values to various pieces of information in the credit report."

Equifax

• "A credit score is a three-digit number, typically between 300 to 850, which credit bureaus calculate based on information in your credit report."
  
  (The scale of Equifax's own score the "Equifax Credit Score," is 280-350.)


• "A credit score is a rating used by a lender to help determine whether or not you qualify for a particular credit card, loan, or service. The credit reporting companies apply an in-depth mathematical model (called an 'algorithm') to the information in your credit file to yield your credit score. Most credit scores estimate the risk a company incurs by lending you money or providing you with a service -- specifically, the likelihood that you'll fail to make payments in the next two to three years."
  
  (FICO and TransUnion state that the period is only two years for FICO scores.)


• (UK) "A credit score is a tool used by a lender to help determine whether you qualify for a particular credit card, loan, or service. Based on information in your credit file, the credit reference agency analyses your information using a complex mathematical model to yield your credit score."


• (Canada) "How is a credit score determined?"

TransUnion

• "What is a credit score? A credit score is a number used by lenders as an indicator of how likely you are to repay your loans. Your credit score is generated by a mathematical formula utilizing the data from your personal credit report." (under "General FAQs," "Credit Basics")


• "A credit score is a number that's calculated using a formula that evaluates how you pay your bills, how much debt you carry and how all of that stacks up against other borrowers." (bottom of page, "TEST YOUR KNOWLEDGE OF SEGMENT 5: CREDIT SCORES," "Question 1 OF 4")


• "Credit scores are numerical summaries of your credit-worthiness based on information from credit bureaus."


• "Your TransUnion Personal Credit Score is displayed above, and was calculated with the VantageScore credit scoring formula. Your credit score is a snapshot of the contents of your credit report at the time the score was calculated. Using objective, impartial formulas to translate the contents of your credit report into a 3-digit score enables lenders to evaluate your application for credit in a fast, fair and more objective manner."


• "A credit score is the result of advanced analytical models that take a 'snapshot' of the consumer's credit report and translate it into a three-digit number representing the amount of risk a consumer brings to a particular transaction, such as financial, insurance or even employment."
  
  That statement by TransUnion is falsity. Employers DO NOT use credit scores. Subsequently, contrary to the above, even TransUnion itself testified, "Now, credit scores aren't used in employment decisions so let's get that straight."
  
  See "Credit scores. Pre-employment screening. Influence: Government - Reports vary."


• (from TransUnion Centroamérica) "A credit score is a number that may be used by lenders in some countries as an indicator of how likely you are to repay your loans. Your credit score is generated by a mathematical formula utilizing the data from your TransUnion credit history. Lenders have been using credit scores as part of the lending decision for more than 20 years and they are widely used in many countries such as the United States, Canada, Colombia, Mexico, South Africa, and Hong Kong."

Fair Isaac

• "What is a credit score? A credit score is a number that summarizes your credit risk, based on a snapshot of your credit report at a particular point in time. A credit score helps lenders evaluate your credit report and estimate your credit risk."


• "Credit score - This term is often used to refer to credit bureau risk scores. It broadly refers to a number generated by a statistical model which is used to objectively evaluate information that pertains to making a credit decision."
  
  (Also, see "Credit bureau risk score")


• "FICO Scores, available at the three major credit reporting agencies, help lenders make accurate, reliable and fast credit risk decisions across the customer lifecycle. The scores rank-order consumers by how likely they are to pay their credit obligations as agreed. As the most widely used broad-based risk score, FICO Scores play a critical role in billions of decisions each year."


• "A credit score is a number that helps lenders and others predict how likely you are to make your credit payments on time."

Federal government definitions

Federal Trade Commission

• "What is credit scoring? Credit scoring is a system creditors use to help determine whether to give you credit. It also may be used to help decide the terms you are offered or the rate you will pay for the loan."


• "Your credit score is a number that reflects the information in your credit report."


• A credit score is a numerical representation of a consumer's credit risk based on information in the consumer's credit file.

Department of the Treasury

• "One common way by which lenders classify borrowers' credit characteristics is through FICO or other credit scores. A credit score assigns a single quantitative measure, or score, to a potential borrower that represents an estimate of the borrower's future loan performance... A borrower's credit score is designed to capture a discrete set of elements that contribute to risk, and in addition to the loan terms is the primary metric that lenders use to price a loan."


• "FICO scores are intended to show the likelihood that an individual might default on a debt based on past credit history."

Department of Housing and Urban Development (HUD)

• "Credit Score: a score calculated by using a person's credit report to determine the likelihood of a loan being repaid on time. Scores range from about 360 - 840: a lower score meaning a person is a higher risk, while a higher score means that there is less risk."


• "FICO Score: FICO is an abbreviation for Fair Isaac Corporation and refers to a person's credit score based on credit history. Lenders and credit card companies use the number to decide if the person is likely to pay his or her bills. A credit score is evaluated using information from the three major credit bureaus and is usually between 300 and 850."

Federal Deposit Insurance Corporation (FDIC)

• "Credit scoring is a system used to evaluate an applicant's creditworthiness, based on the key attributes of the applicant and aspects of the transaction." (broad, lending definition)


• "A credit score is designed to predict the likelihood that a borrower will repay a loan, based on historical outcomes of loans to borrowers with similar characteristics."

Federal Citizen Information Center (FCIC)

"A credit score is a number that helps lenders and others predict how likely you are to make your credit payments on time. Each score is based on the information then[SIC] in your credit report."

PREVIOUS VERSION OF THIS PAGE (2009) AT ARCHIVE.ORG