Credit Score: What's My Credit Score?

When you ask, "What's my credit score?" you're asking for a three digit number from 300 to 850 that represents the likelihood that you will make payments on time.

The higher your score the more trustworthy you are considered.

Your credit score is determined by the Fair Isaac Corporation, FICO for short. Therefore, your credit score is also referred to as your FICO score.

Fair Isaac Corporation analyzes your history of credit as recorded by three reporting agencies - Equifax, Experian, and TransUnion.

But each report is analyzed separately, independent of each other. Therefore, you actually have three FICO scores, one for each version of your credit history.

It's highly unlikely your three credit scores will be identical simply because the three credit report agencies keep separate records. Their records are based solely upon the information that lenders submit to them.

Lenders report to Equifax, Experian, and TransUnion on your financial behavior. For example, whether or not you have made timely payments on your debts.

Some companies chose to report to one, perhaps two agencies, but not all three. Therefore, your FICO scores will differ.

Nevertheless, your three FICO scores will probably not vary greatly if your payment history has been consistent.

FICO looks at five areas: The age of your credit history; the amount of debt you carry; your history of making payments; new credit; and your types of credit (for example, credit cards, home loan, car loan.).

Payment History: Do you make payments on time or do you make late payments? Any bankruptcies, foreclosures, liens, or judgments?

Amount of debt: Do you owe so much each month that it is doubtful you could safely handle an additional debt?

Credit history: The general rule of thumb is that a longer credit history works to your benefit. In other words, you have shown that making payments on time is a habit.

New credit: Red flags are raised if you've suddenly gone on a spree, opening new lines of credit with numerous lenders.

Your types of credit: This is not a major consideration when determining your FICO score but it is, nevertheless, a factor. There's an advantage to having different types of credit rather than simply one type of credit. For example, having a history of paying on time for your mortgage, car loan, and a credit card is better than having a history of paying on time for only three credit cards.