What Is It?
A credit score is a number that represents the likelihood that a customer will pay their bills, particularly their debts, on time.
It could also be called a risk score. Banks and lenders will view you as low risk if you have a high credit score. That implies you’re more likely to be approved when applying for a credit card or a loan. To know more about this, you can visit mercurynews.com.
How To Calculate It?
Credit bureaus calculate credit scores based on the information in their files.
Equifax, Experian, and TransUnion are the three major credit bureaus that manage consumer credit scores. Each bureau maintains credit files on consumers in the United States. The bureau includes financial information about you in your file. If a company files that you paid your bill on time, that information will be added to your file. The same would be true if it informs you that you are late on a payment.
A credit bureau uses its credit scoring system to calculate your credit score based on the information it has on file for you. It does not, however, do this only once.
FICO Score Or Credit Score?
A FICO® Score is a credit score calculated using the FICO scoring system. FICO has a variety of scoring systems, which implies that each customer will have a variety of FICO® Scores. FICO® Scores are well-known because they are the most widely used by lenders.
To put it simply, each FICO score is a credit score, but not every credit score is a FICO score. To know more, visit mercurynews.com.