A credit score is a snapshot at a point in time that estimates how likely it is that a debt will be repaid, based on payment history and amounts owed.
In the U.S., there are 3 major credit bureaus - Experian, Equifax and TransUnion. These 3 credit bureaus collect information from your creditors about the amounts that you owe and the payments that you make, along with other factors, and using statistical models, assign you a 'credit score'.
There is no single, 'true' credit score - there are industry specific scores for different types of lending - auto lending, home lending, credit cards, etc. that put differing weights on factors used in the statistical models. Individual lenders may also request specific changes to credit scoring models built for them.
Many credit scoring models are based on work done by Fair, Isaac & Co., often abbreviated as "FICO". Recently, the 3 major credit bureaus banded together to develop a competing scoring model, called a 'Vantage' score. This model is not yet widely used.
FICO scores are the most widely used credit scores. FICO credit scores run from 300 (high risk) to 850 (low risk), so the higher your score, the easier it will be for you to get loans with more favorable interest rates. In addition to your payment history, FICO takes into account the types of credit you've used, the length of your credit history, and the amounts you owe.
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