Generally, a credit score is a number based on a formula used to evaluate a consumer’s credit information. Usually 3 digits long, this number falls on a scale or range of possible scores. Typically, the higher the number, the better the score.
Credit scores are like grades. Based on its formula’s calculation and the information it uses, a credit score gives the user a sense of how likely it is the consumer will fail to pay back debt. Typically, the “user” will be a lender evaluating a loan application, deciding on an interest rate, or making another credit-related decision.
One key takeaway: there isn’t just one credit score. Different companies produce different scores for different purposes. And lenders are free to use any, all or none of them. Want to get a sense of where your TransUnion credit stands? See your score now with unlimited updates, included as part of TransUnion Credit Monitoring.