Credit Scores: What They Measure and What They Miss

A credit score is a model's estimate of how likely someone is to repay credit on time, based on information in a credit report. It is not a complete picture of your finances and it does not by itself decide whether you will be approved. Lenders may use different models and report data, so the score you see may differ from the score a lender uses. The CFPB explains why there is no single credit score.

What affects a score?

FICO describes five broad categories: payment history, amounts owed, length of credit history, new credit and credit mix. The published category percentages describe a general FICO model; their importance can vary with a person's credit file. Other scoring models may weigh information differently.

A useful starting point is to check the facts behind the number. Are account balances and payment histories reported accurately? Are any accounts unfamiliar? See how to read your credit report before reacting to a one-day score movement.

What can you control?

The CFPB's rebuilding guidance emphasizes paying on time, keeping card balances manageable, avoiding many new applications in a short period and correcting report errors. None of these actions guarantees a particular point increase or timeline. Taking on debt solely to change the mix of accounts can create costs without solving the underlying problem.

If a lender denies an application, its notice is more useful than guessing at a target score. Read what to do after a denial before applying again.