In detail
A credit score is a number produced by a scoring model that analyzes the contents of a credit report. The report itself is a record of credit accounts, payment history, public records where applicable, and inquiries. The score is not part of the report; it is a separate calculation derived from that data. Common scoring models include FICO and VantageScore, and each model may weigh factors such as payment history, amounts owed, length of credit history, new credit, and the mix of credit accounts. Scores are typically expressed within a defined range, and different models can produce different numbers for the same report. Scoring models are created by independent companies, not by the national credit reporting companies. A lender may request a score from one or more credit reporting companies, and the score version used can vary by lender and by the type of credit being evaluated. Because scoring models and lender requirements differ, there is no single credit score that applies to every situation. Federal law, including the Fair Credit Reporting Act, governs how credit reporting companies handle consumer information and gives consumers the right to obtain certain disclosures and to dispute inaccurate or incomplete information in their reports. A credit score is one data point among many that a lender may consider. Some lenders also review income, employment history, existing debt obligations, and other details. Scores can change as the underlying credit report changes, such as when an account balance is updated, a new account is opened, or an inquiry is recorded. Consumers can obtain scores from a variety of sources, including some credit reporting companies, lenders, and nonprofit counseling services. Understanding what a score represents, and what it does not, helps consumers interpret the information they receive.