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What Is Your Credit Score?
A credit score is a numerical snapshot that’s derived from information in your credit file. Which of these statements also describes how credit scores work?
- All credit scores are determined using the same scoring system.
- Credit scores help lenders determine whether a person should be approved for specific credit cards, loans, and services.
- Credit scores rely on a simple theoretical model that estimates the risk a company will incur by lending money or providing you with a service.
“B” is correct. There are many types of credit scores. Each relies on its own complex mathematical model to determine how financially viable you are. The most common one was designed by the Fair Isaac Corporation and is known as “FICO.” FICO scores range from 300 to 850. The higher your score, the better chance you have of getting credit. To learn more, visit Guidewell Financial Solutions’s “Understanding Credit Reports and Credit Scores” course.