Credit Scores and How They Work
What is a credit score? And how exactly does it work?
Your credit score is a number lenders use to tell if you’ll be able to keep up with loan payments.
Your score is calculated by taking all the information from your personal credit history and breaking it into five different categories.
Each category is given a different weight, but they all figure into your final score.
The mix of credit types is also important. You should have a healthy mix of credit, like credit cards, an auto loan, and a mortgage, rather than all one kind.
You should also know your credit score is sometimes called your FICO score. It’s just another name people use, but it means the same thing. Scores usually range from 300 to 850. A score of 670 or above is considered a good credit score, while a score of 800 or above is considered exceptional.
Have any specific questions about your credit score? Contact your local banker to find out more.
Confused about credit scores and the complex ways they’re calculated? Start with a high-level understanding of scores, what affects them and where yours should be.
What is a credit score?
A credit score is a rating of your creditworthiness. It’s based on things like payment history, current debt, available credit and other factors.
So, then what’s a FICO score?1
A FICO score is a credit score provided by the Fair Isaac Corporation, and it’s calculated from a balance of different debt information about you.
Credit score examples: Good - 670, Very Good - 724, Excellent - 800
What is a good score?2
Your credit or FICO score can range from 300-850. A good score is 670 or above. Over 800 is exceptional.
How is a FICO score calculated?3
Your score is calculated based on five different factors. Each holds different weight over your score.
This information and recommendations contained herein is compiled from sources deemed reliable, but is not represented to be accurate or complete. In providing this information, neither KeyBank nor its affiliates are acting as your agent or is offering any tax, accounting or legal advice.