A credit score, in the United States, is a number representing the creditworthiness of a person, or the likelihood that person will pay his or her debts. A credit score is primarily based on a statistical analysis of a person's credit report information, typically from the three major American credit bureaus: Equifax, Experian, and TransUnion. Lenders, such as banks and credit card companies, use credit scores to evaluate the potential risk posed by lending money to consumers and to mitigate losses due to bad debt. Using
credit scores, lenders determine who qualifies for a loan, at what interest rate, and to what credit limits. The Fair Isaac corporation created the first credit scoring system in 1958, for American Investments, and the first credit scoring system for a bank credit card in 1970, for American Bank and Trust.

Each of the three credit bureaus may have different information about any particular person, and there are many different credit scoring models in use, which means a person may have several different credit scores simultaneously. Many lenders use third-party credit scoring systems, such as Fair Isaac's FICO scoring model, NextGen, VantageScore, and the CE Score, to evaluate the creditworthiness of a borrower. Because a score does not consider race, sex or ethnicity, it is generally considered to be the most fair and objective underwriting tool available to lenders.

FICO score and others

FICO is the acronym for Fair Isaac Corporation, a publicly-traded corporation (under the symbol "FIC") that created the best-known and most widely used credit score model in the United States. The FICO score is calculated statistically, with information from a consumer's credit files. The FICO score is primarily used in credit decisions made by banks and other providers of secured and unsecured credit. Banks and other institutions using such scores as a factor in their lending decisions may deny credit, charge higher interest rates, demand more collateral, or require extensive income and asset verification if the applicant's FICO credit score is low.

FICO score

FICO scores are usually intended to show the likelihood that a borrower will default on a loan; a separate score, the BNI, is used to determine the likelihood of a borrower's declaring bankruptcy. Each credit bureau also calculates a credit score (not a FICO score) using its own proprietary model which differs from the model used by Fair Isaac Corporation. It is not unusual for these scores to differ—by 50(or 100) points or more—for the same borrower. For the three types of credit for which a FICO score is generally used (mortgages, automobile loans, and consumer credit), lenders usually establish different cut-offs for lending, reflecting the loan default risks inherent to these different types of lending. The score also depends on what credit reporting agency the data are obtained from, since not all creditors report to all three. The score Fair Isaac sells to borrowers is their consumer credit score, and borrowers can choose the agencies from which scores will be calculated.

Credit reporting agencies

In the U.S., three credit reporting agencies, Equifax, Experian, and TransUnion, calculate a borrower's credit score using their own different computation formulas. The scores they generate (with trademarked names), differ in what they mean to predict, the statistical methods used to determine a creditworthiness score, and what data are used and how they are weighted. Beacon, Beacon 5.0, Beacon 96, and Pinnacle scores are available only from Equifax; Empirica, Empirica Auto 95, Precision Score, and Precision 03 from TransUnion; and the Fair Isaac Risk Score is available from Experian. Although the Fair Isaac Corporation develops these credit score versions for the different agencies, they are different numbers, although they derive from a common engine called the Fair Isaac Risk Model. These scores are periodically updated to reflect current consumer loan repayment rates.

NextGen score