What Is a Credit Score?

A credit score is a three-digit number that represents your creditworthiness. 

Your Credit Score is calculated based on your credit history and is used by lenders, banks, and other financial institutions to determine your creditworthiness when you apply for credit.

Credit scores typically range from 300 to 850, with higher scores indicating a better creditworthiness. There are different credit scoring models, but the most commonly used one is the FICO score, which was developed by the Fair Isaac Corporation.

The FICO score is calculated based on several factors, including:

1. Payment history: This includes the timeliness of your payments and whether you have any delinquent or late payments.

2. Credit utilization: This refers to the amount of credit you use compared to your credit limit. High credit utilization can negatively impact your score.

3. Length of credit history: This considers how long you have had credit and the average age of your credit accounts.

4. Credit mix: This considers the types of credit you have, such as credit cards, loans, and mortgages.

5. New credit: This considers the number of new credit accounts you have opened recently and the frequency of credit inquiries.

The exact calculation of a credit score can vary based on the credit scoring model used, but the factors listed above are generally considered in the calculation. It's easy to maintain a good credit score by paying bills on time, keeping credit card balances low, and being cautious when opening new credit accounts.