Credit score

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Credit score explained

A credit score is a number that shows how likely you are to repay debts. It’s based on information in your credit report, which comes from credit bureaus. Lenders use your score to decide if they should lend you money, what interest rate to offer, and how high your credit limit should be. Other organizations, like mobile phone companies, insurers, and landlords, may also use credit scores to judge risk.

How a score is calculated
Your score comes from your borrowing and repayment history. Key factors include:
- Whether you pay on time
- How much debt you currently owe
- How long you’ve had credit
- How often you’ve opened new credit accounts
- The mix of credit types you use
Different countries and lenders use different scoring models. The best-known in the United States are FICO and VantageScore, but many other systems exist around the world. Some places also use “positive” or “negative” reporting, which can change how scores are built.

Global differences
There isn’t a single global score. Each country has its own rules and bureaus:
- United States: major bureaus (Experian, TransUnion, Equifax) provide scores like FICO or VantageScore; you can usually get a free annual credit report, and many lenders use their own scoring models.
- United Kingdom: no universal score; lenders largely use their own internal scoring, though consumer-facing scores exist.
- Canada, Australia, India, and other countries have their own systems and rules for reports, scores, and access to information.
In many places you can request copies of your credit report, check for errors, and learn what affects your score.

How to improve your score
- Pay all bills on time, every time
- Keep credit card balances low relative to limits
- Avoid opening several new accounts at once
- Check your credit report for mistakes and dispute any inaccuracies
- Build a longer credit history with responsible borrowing

Why it matters
A good credit score can help you qualify for loans and get lower interest rates. It’s a useful tool for lenders to assess risk, and it’s increasingly used by various services and providers beyond traditional banks. By managing your credit wisely, you improve your chances of favorable lending terms in the future.