Your credit score is that “magic number” that tells the lender how much of a risk you are.

For some lenders, it’s all they need to get started; for others, a more detailed report will go along with the score. Generally, you want the lender to have plenty of information about you (unless you’re trying to hide something, which I of course cannot recommend!), but your credit score is pretty much your “final grade” in the loan application “exam”.

The bulk of your credit score is calculated from your payment history (are you on time and consistent?) and how much credit you have available versus how much debt you have (your “debt-to-credit ratio”).

Other things that are taken into account: how long your credit history is, how many new accounts you have, and how much credit you could access in a short period of time (i.e., could you blow through $10,000 in credit over the weekend?). Credit checks, or “inquiries”, also make a difference, although very little and only in specific ways (see the Your Credit page for a more thorough explanation of this).

The most common type of credit score is FICO, a three-digit number between 300 and 850. The median FICO credit score is around 715-730. If you’re above that, you’ll pretty much have your pick of loan offers…

The cutoff point (where you go from ‘prime’ to ‘subprime’, so to speak, and begin to be a high risk to lenders) is somewhere between 620 and 680, varying somewhat from one lender to another. The lower you go into and below the 600s, the more limited you’ll be in terms of interest rates, terms, down payments, et cetera.

Checking your FICO score is rarely free. Some bank accounts will entitle you to check your score, but usually the only way to find out is to sign up with a credit reporting agency (including FICO itself).

However, there are a number of other credit scores running around. Each of The Big Three (Experian, Equifax, and TransUnion) has their own way of calculating credit score, and it can be quite easy to confuse them with FICO (in fact, some argue that Experian explicitly contributes to the confusion!).

Additionally, a joint service between all three, called VantageScore, provides a credit score with a range of 501 to 990. The credit reporting agencies will typically offer various products that include one or more of these scores, so pay close attention to the fine print!

Don’t get too confused — most lenders will use your FICO score. The other scores are more for curious consumers than lenders…though the Big Three are doing what they can to challenge FICO.