What is a Credit Score?

What is a Credit Score?

Understand Your Credit—and Take Control of Your Financial Future

Your credit score is a key number that lenders use to determine your creditworthiness—how likely you are to repay loans on time. Whether you’re applying for a mortgage, car loan, or credit card, your score can impact approval, loan amount, and the rate you pay.

The most widely used credit score is the FICO® score, which is used by about 90% of lenders. FICO scores range from 300 to 850, and they’re based on the information in your credit report from one of the three major credit bureaus: Equifax, Experian, and TransUnion.

Credit Score Ranges & What They Mean

  • <580: High risk borrower

  • 580–669: Below average, still eligible with many lenders

  • 670–739: Near average, considered a reliable borrower

  • 740–799: Above average, strong history of credit responsibility

  • 800+: Excellent credit, lowest risk to lenders

Why Credit Scores Matter

  • Determine loan approval and interest rates

  • Affect credit card limits and insurance premiums

  • Impact housing applications and even job offers in some industries

Even small improvements in your score can save you thousands of dollars over time.

What Affects Your Credit Score?

FICO Scores are based on five key factors:

  • Payment history: on-time payments (35% of score);

  • Credit utilization: how much you owe vs. limits (30%);

  • Length of credit history (15%);

  • Credit mix: types of accounts: credit cards, car loan, home loan (10%);

  • New credit: recent applications or inquiries (10%).

Why You May Have Different Scores

Each credit bureau may have slightly different data, so your score can vary. Errors on a credit report can drag your score down—sometimes by dozens of points. That’s why it’s essential to review all three reports regularly. Some websites offer free scores that don’t reflect FICO Scores, and lenders may not use those scores.

How to Build and Maintain a Strong Credit Score

  • Make on-time payments every month

  • Keep credit card balances low

  • Don’t open unnecessary accounts

  • Check your credit reports annually at AnnualCreditReport.com

Take the Next Step Toward Better Credit

·      Your credit score is a tool for building your financial future.

·      Whether you’re just starting out or need to rebuild, money coaching can help.

Book your FREE 30-minute consultation with Golden Eagle Financial Coaching and get a personalized action plan to:

  • Understand your credit report;

  • Improve your credit factors; and

  • Increase your chance of approvals and lower rates.

Let’s take the guesswork out of your credit and put you back in control.