How is a Credit Score Calculated?

A credit score is a value assigned to several criteria used in making lending decisions. Criteria include the amount you owe on non-mortgage-related accounts such as credit cards, your payment history and credit history. Scorers take this information from your credit report and plug it into formulas that calculate a value representing the amount of risk you pose to a lender. That value takes into account the track record of other consumers with similar credit profiles. By looking at this value, or score, lenders are able to roughly gauge whether it's a good idea to extend you credit. Fair Isaac calculates the widely used FICO credit score on a scale ranging from 300 to 850 the higher, the better. It is used nationwide by lenders to judge credit worthiness. The score calculate generally used information from one of the three main credit bureaus: TransUnion, Experian and Equifax. It's possible there are discrepancies among information held at each of the bureaus that could affect your score and the interest rate you receive.