You may know about credit reporting agencies and credit scores, but still want to know, “What is a true credit score?” A true credit score is the combination of many factors in regards to your credit and payment history. It’s a combination of information from the 3 major bureaus (Equifax, Experian and TransUnion) that’s taken and calculated by a company like FICO (Fair Isaac Company) to determine a three-digit number. You get one number per credit reporting bureau. Those 3 numbers represent your credit score, so it’s important that you check your credit regularly.

What is a true credit score and Why Does it Matter?

Your true credit score shows everyone who asks for it how credit worthy you are via information shown on your credit report. If a lending institution, credit card company, or even an employer considering hiring you, contacts FICO for your credit score, they’re given one of the numbers. Some may choose the low number or the high, some may choose the middle.

]What is a true credit score?” In this case, the number is used to determine whether or not you’re able and likely to pay them back if they issue you credit. A good score, typically 720 or above (on a scale that goes up to 850), tells the inquirer that you have good credit. You rarely if ever are late on a payment (and never more than 30 days late). This number also tells them that the amount of credit you have isn’t too much for your income, so you have the means to pay back more credit. Companies get credit report information on a regular basis.

The number also lets them know if you’ve had a bankruptcy discharged within the last decade—if your score is 720 or above, you haven’t. You can probably get credit with a good interest rate. A little lower than 720, you can probably still get credit, but your interest rate will be higher because you’ve probably been late with a payment over the last year. You can obtain a copy of your credit report for free through any of the major bureaus.

What is a true credit score if My Credit Isn’t Good?

A true credit score that shows a person has been late more than a couple payments in the last year, and that maybe the payments are later than 30 days sometimes, is usually below 620. A loan given to someone with a score that low is considered a sub-prime loan, and carries very high interest rates to offset the pretty high risk that it won’t be paid back on time, if at all.

To determine your current score, a www credit report is available online.