Credit Scores

In the United States, a credit score is a credit rating that represents an estimate of an individual's financial creditworthiness as calculated by a statistical model. A credit score attempts to quantify the likelihood that a prospective borrower will fail to repay a loan or other credit obligation satisfactorily over a specified period of time.

A credit score is typically based on the information in an individual's credit report. Lenders such as banks and credit card companies use credit scores to manage the risk posed by lending money to consumers. A trusted system is where credit scores are obtained. The most widely known in America is FICO, an acronym for Fair Isaac Corporation, traded publicly under the FIC symbol.

A FICO score is, for the most part, a tool for those who look to obtain debt. There are many incorrect myths around why one should build a FICO score that are spread by the banking industry and the media outlets they endorse, such as financial adviser Suze Orman.