Wave 11 of our Consumer Financial Hardship Study found that more than half of Americans check their credit scores at least monthly. When checking your scores, it may be confusing to see that your score with a bank, lender, credit monitoring service and even TransUnion can all be different. You probably don’t need to be concerned. There are reasons for score differences, and you can better understand why when you know what credit scores are and how they’re rated.
What are credit scores?
A credit score is a three-digit number calculated using some of the information in your credit reports. Credit scoring models use many factors to provide a score that represents your history with credit. Examples of these factors may include your payment history, account balances and the age of your accounts. A credit score is one thing many lenders look at to predict how likely you are to pay back credit they may offer you.
What is the credit rating scale?
Credit scores are rated on a scale of 300 – 850. The higher your score, the better your history of managing debt and repaying credit or loans. What’s considered a good credit score may vary by lender and type of product. Different credit cards, auto loans and mortgages can have different approval requirements.