is committed to the highest ethical standards and reviews services independently. Learn How We Make Money

What Is a Credit Score?

Andrea Coombes

Written by Andrea Coombes
Fact-checked by Dayana Yochim
Edited by Carolyn Kimball

March 13, 2024

A credit score is a three-digit number, usually ranging from 300 to 850, that’s used as a predictive tool by lenders to decide whether they should lend money to you.

Quick take: According to the credit-score algorithms, the higher the score, the lower the risk you won’t pay back the money. Credit scores are largely based on whether or not you pay your bills on time, and they’re derived from the information in your credit reports. If your score is in the good-to-great range, you can save thousands of dollars over time thanks to lower interest rates on your debt.

Tell me more! Here are some credit score facts to keep in mind:

  • The data underlying credit scores comes from our credit reports. If you’ve ever borrowed money from a financial services company, that company likely has reported your payment history to the big three credit reporting companies: Experian, Equifax and TransUnion. Read more on how credit scores are calculated.
  • Generally, credit scores range from a low of 300 to a high of 850, though there are many different types of credit scores, with different ranges.
  • Each of us has many different credit scores, so it’s impossible to know the precise number a lender is looking at when we apply for credit.
  • Even if you never plan to borrow money, it’s smart to keep your credit in top shape for the future, just in case, because credit scores have become an indelible part of our financial lives. A person’s credit rating can affect their ability to rent an apartment, how much they pay for an insurance policy, and whether they have to pay a deposit for cell phone service.

One more thing: Did we mention there are different types of credit scores? That means you don’t have just one credit score. But don’t fret. It’s absolutely fine and, in fact, smart to pick just one credit score that you can access for free and then keep an eye on just that one score. Here’s more on how to check your credit score.

Bottom line: Credit scores have become an integral part of our financial lives, so it makes sense to do what we can to keep our credit scores moving higher. That said, sometimes we hit potholes on our money path. If your credit isn’t in the best place right now, check out our story on how to fix your credit score.

Popular Credit Card Guides

Popular Credit Card Reviews

❮    Previous

What Is Credit? (And Why It Matters)

Next    ❯

What Is a Good Credit Score?

About the Editorial Team

Andrea Coombes
Andrea Coombes

Andrea Coombes has 20+ years of experience helping people reach their financial goals. Her personal finance articles have appeared in the Wall Street Journal, USA Today, MarketWatch, Forbes, and other publications, and she's shared her expertise on CBS, NPR, "Marketplace," and more. She's been a financial coach and certified consumer credit counselor, and is working on becoming a Certified Financial Planner. She knows that owning pets isn't necessarily the best financial decision; her dog and two cats would argue this point.

Dayana Yochim
Dayana Yochim

Dayana Yochim has been writing (articles, books, podcasts, stirring speeches) about personal finance and investing for more than two decades, focusing on bringing clarity and the occasional comedic aside to what is often a murky, humorless topic. She’s written for NerdWallet, The Motley Fool,, Woman’s Day, Forbes, Newsweek and others, and been a guest expert on "Today," "Good Morning America," CNN, NPR and wherever they’ll hand her a mic.

Carolyn Kimball
Carolyn Kimball

Carolyn Kimball is Managing Editor for Reink Media Group and the lead editor for content on Carolyn has more than 20 years of writing and editing experience at major media outlets including NerdWallet, the Los Angeles Times and the San Jose Mercury News. She specializes in coverage of personal financial products and services, wielding her editing skills to clarify complex (some might say befuddling) topics to help consumers make informed decisions about their money.

More Topics