A credit score is a number between 300 and 850 that serves as a numerical representation of a person’s creditworthiness. The higher the score, the better an individual’s chances of securing a loan since a higher score suggests a greater likelihood that an individual will repay a loan on time.
The score is calculated based on an individual’s credit history, which includes the number of open accounts the individual has, his/her repayment history, and the amount of debt the individual has (see also credit report).
The FICO score, created by the Fair Isaac Corporation, is the most commonly used credit scoring system and is currently used by 90% of top lenders.
[Last updated in June of 2021 by the Wex Definitions Team]