Your Credit Score

What is a credit score? How is my credit score calculated?

A credit score is a number that reflects the information in your credit report. The score summarizes your credit history and helps lenders predict how likely it is that you will repay a loan and make payments when they are due. Lenders may use credit scores in deciding whether to grant you credit, what terms you are offered, or the rate you will pay on a loan.

Information used to calculate your credit score can include:

  • The number and type of acounts you have (credit cards, auto loans, mortgages, etc.);
  • Whether you pay your bills on time;
  • How much of your available credit your are currently using;
  • Whether your have any collection actions against you;
  • The amount of your outstanding debt; and
  • The age of your accounts.

What can cause my credit score to change?

Because your credit score reflects the information in your credit report, changes to your credit report may cause your credit score to change. For instance, if you pay your bills late or incur more debt, your credit score may go down. However, if you pay down an outstanding balance on a credit card or mortgage or correct an error in your credit report, your credit score may go up.

How can I get my credit score?

In some cases, a lender may tell you your credit score for free when you apply for credit. For example, if you apply for a mortgage, you will receive the credit score or scores that were used to determine whether the lender would extend credit to you and on what terms. You may also receive a free credit score or scores from lenders when you apply for other types of credit, such as an automobile loan or a credit card. 


How can I improve my credit score?

To find out steps you can take to improve your credit score, read the Federal Reserve's 5 Tips for Improving Your Credit Score. Click the link in the green bar to the left.

This information is from the Board of Governors of the Federal Reserve System Consumer's Guide.