What Is a Credit Score?

Beginner: The Number, the Ranges, and the Bureaus

What the score is

A credit score is a number, usually between 300 and 850, that predicts how likely you are to pay back borrowed money. Higher is better. Lenders look at it before they hand you a credit card, a car loan, or a mortgage.

Think of it like a trust rating. The higher the number, the more a lender believes you will pay them back on time. That trust is what gets you approved, and it is what gets you a lower interest rate.

The ranges in plain terms

Scores are grouped into rough bands. Generally, the low 300s to the high 500s is considered poor, the 600s is fair, the 700s is good, and the mid 700s and up is very good to excellent.

These cutoffs vary by lender and by the exact scoring model. Do not obsess over a single point. The band you are in matters far more than the exact digit.

The three credit bureaus

Three companies collect the information your score is built from: Equifax, Experian, and TransUnion. They are called credit bureaus or credit reporting agencies.

Each one keeps a file on you called a credit report. Because lenders do not all report to all three, your report can look a little different at each bureau, which means your score can differ slightly too. That is normal.

Score versus report

Here is the difference that trips people up. Your credit report is the record: the accounts, the payment history, the balances. Your credit score is the number calculated from that report.

The report is the story. The score is the summary. You can pull your report for free from the official site annualcreditreport.com, and you can see a score for free through services like Credit Karma.