Finance Dictionary
Credit Score
Definition
A statistical number that evaluates a consumer’s creditworthiness and is based on credit history.
Deep Dive
A credit score is a numerical expression based on an analysis of a person's credit files, representing their creditworthiness. It is a statistical number that evaluates a consumer’s credit history and is primarily used by lenders to assess the likelihood of an applicant repaying debts and to determine the interest rates and terms of loans. Scores typically range from 300 to 850, with higher scores indicating lower risk to lenders.
Examples & Use Cases
- 1An individual applying for a mortgage with a FICO score of 780
- 2A small business owner applying for a loan with a strong business credit score
Related Terms
Credit ReportCreditworthinessFICO Score