What's a credit score?

Summary

• Credit scores are three-digit numbers that show how likely you are to repay borrowed money.
• Companies that develop credit scores use information from your credit reports, such as payment history and credit utilization.
• A higher score can help you qualify for credit, get better rates and save money over time.

Credit scores are three-digit numbers that represent how likely you are to repay borrowed money. They're calculated from the information in your credit reports, which track your history of borrowing and repayment.

The more you know about your credit score, the better prepared you are to use credit as a tool to reach your long-term goals. Let’s look at why your credit score is so vital to your financial future.

Why are credit scores important?

You can think of your credit score as being like a report card for your financial life. Just as a report card sums up how you’ve performed in school, a credit score shows how well you’ve handled credit. Lenders look at your credit score to decide if they can trust you to repay money you’ve borrowed.

But it’s not just lenders who consider your credit score. Landlords and utility providers may review it as well. All in all, a strong credit score may provide:

• Access to credit. Lenders often use credit scores to decide whether to approve applications for credit cards, personal loans, auto loans or mortgages.
• Better rates and terms. A higher score may qualify you for lower interest rates and more favorable repayment terms, which can save you money over time.
• Housing opportunities. Landlords may check your score when you apply for a rental, using it as an indicator of whether you’ll reliably pay rent.
• Everyday services. Utility companies and cell phone providers sometimes use credit scores to determine deposit requirements or eligibility for certain plans.

In short, a good credit score gives you more flexibility when you need to borrow or make big purchases.

What factors help determine a credit score?

The companies that develop credit scores use several factors from your credit reports. The weight of each factor depends on the scoring model, but most scores consider:

• Payment history. Paying your bills on time has a major impact on your credit score. Even one missed or late payment can cause your score to drop.
• Amounts owed. This looks at how much debt you carry. A key component of this is your credit utilization ratio, which compares the amount of revolving credit you’re using to your total available credit.
• Credit history length. The longer accounts have been open, the more insight lenders have into your borrowing habits.
• Credit mix. Having a variety of accounts, such as credit cards, auto loans and mortgages, signals you can manage different types of borrowing.
• New credit. Applying for new accounts usually requires a hard inquiry into your credit history. Several of these in a short period may suggest higher risk to lenders.

How long does it take to establish a credit score?

People often think they get a credit score when they open their first credit card, but that's not the case. Credit scores are based on habits – not single actions – so it can take anywhere from one to six months to establish a score, depending on the scoring model.¹

Building credit takes time because scoring models need data to make predictions. A single account opened yesterday doesn't provide much information, so scoring companies wait to see patterns in your behavior.

What are the credit score ranges?

Credit score ranges are categories that help lenders quickly interpret scores. These ranges, however, vary by scoring model. For example, the model developed by FICO®, used in about 90% of U.S. lending decisions,² uses a scale of 300 to 850:

FICO® Score ranges:³

• Exceptional: 800–850
• Very good: 740–799
• Good: 670–739
• Fair: 580–669
• Poor: 300–579

VantageScore®, another scoring model, uses a similar scale but defines its ranges a little differently. In general, a higher score represents a stronger credit profile.

How do you check your credit score?

You have several options for checking your credit score, including:

• Your bank or credit card provider. Many lenders provide customers access to a free FICO® Score or VantageScore® as part of their online banking tools. U.S. Bank cardholders can check their scores for free with the mobile app by enrolling in the Credit Score Program.
• Credit bureaus. Experian®, Equifax® and TransUnion® each offer credit scores directly on their websites. Some are free, while others may be part of a paid monitoring service.
• Credit monitoring services and apps. Several financial apps and websites partner with the bureaus to give users free access to their scores.

Bonus tip: Checking your own credit score is considered a soft inquiry, so it won’t impact your credit.

Why are your credit scores different?

One reason you might see different credit scores is that credit bureaus don't always have the same information. One lender might only report to Equifax, while another might report to Experian and TransUnion – and different information leads to different scores.

Scoring models can also be a reason. FICO and VantageScore use similar factors to calculate your credit score, but they weigh those factors differently, so the scores don’t always match.

You may also see different versions of the same model. For instance, a mortgage lender might use FICO Score 8 while your credit card company shows FICO Score 9. In addition, scoring model developers create industry-specific versions for mortgages, auto loans and credit cards.

Long story short? It’s normal to see slightly different numbers depending on where you check your score. However, if you see wildly different credit scores, then you want to check your credit reports for errors.

Your credit score is what you make of it.

As you open accounts and take out loans, your credit score changes — and those changes create opportunities to establish or improve it. The process takes time, but your efforts can build a strong foundation for your financial future.

Sources

¹ NerdWallet, “What is VantageScore?” https://www.nerdwallet.com/article/finance/vantagescore-fico-score-the-difference, March 26, 2024, accessed September 4, 2025.

² FICO, “Basic Facts about FICO Scores,” https://www.fico.com/en/latest-thinking/fact-sheet/basic-facts-about-fico-scores, accessed September 4, 2025

³ myFICO, “What is a Credit Score?” https://www.myfico.com/credit-education/credit-scores, accessed September 4, 2025.