What is credit score?
The Bankrate.com financial term of the day is: "Credit Score."
When you play the game of debt, somebody really does keep score. A credit score is the information in your credit report boiled down into a three-digit number that's meant to indicate how much risk there is that you won't pay back what you owe. The standard credit score is called a FICO score, and it can be as low as 300 and as high as 850. Lower risk brings a higher credit score, which in turn can bring better terms when you borrow money. Lenders aren't the only ones who check your credit score to decide whether to do business with you and on what terms. For example, many car insurance companies will reward higher credit scores with lower premiums on the belief that a person who's a better credit risk will be less likely to make insurance claims.
A credit score is three little digits that have a big impact on your ability to get credit and at what price.
To learn more about credit scoring, visit the debt management section at Bankrate.com.
Get your free credit score at myBankrate.com.