A credit score is a numerical representation of your ability to pay credit and/or debt over time. It is used by lenders to assist them in determining which loan programs and interest rates can be made available to you as a potential borrower.

There are three major companies that issue credit and background information: Equifax, Experian, and TransUnion. They do not check the accuracy of the information; rather, they simply accept the information that is reported to them generally on a monthly basis.

When you apply for a mortgage, a tri-merge credit report will be requested from a credit reporting company. This company pulls together a credit report from all three bureaus electronically.

Along with the information, the credit reporting company receives a numerical score. The score represents, among other things, a composite of your credit history, employment, and ability to save.

If your credit score is high, the lending industry may reward you by requiring a smaller amount of paperwork to prove you are creditworthy. Your interest rate and fees are also based on the level of your score.

Credit Score Guidelines

Excellent Credit

Credit scores of 720 and above

Very Good Credit

Credit scores between 680-719

Good Credit

Credit scores between 620-679

Fair Credit

Credit scores between 580-619

Poor Credit

Credit scores 579 and below

Credit Score Tips