Understanding Your Credit Score

In today’s world, your credit score is one of the most important factors involved in lending.

So what is it?

The Consumer Financial Protection Bureau (CFPB) describes your score as “a number that is used to predict how likely you are to pay back a loan on time.”

Most creditors, no matter what you are buying, not only make their decisions based in part on your credit score but, more importantly, may determine the interest rate you are charged based on your credit score.

Both the CFPB and Federal Trade Commission (FTC) help consumers to understand credit scoring and how it may affect access to credit and other services. “Usually a higher score makes it easier to qualify for a loan and may result in a better interest rate,” says the CFPB.

A person’s credit worthiness is partly influenced by their credit experiences, which are compiled in a credit report. Credit reports may be checked for accuracy and copies of your reports are available from the national credit reporting agencies. The CFPB outlines the options to request them here.

For further information about credit scores visit the CFPB “Credit Reports and Scores” and FTC “Credit Scores” website pages.