What is a credit score?
A credit score is a numerical representation of an individual’s creditworthiness. It is based on a borrower’s credit history and credit behaviors. Credit scores are used by lenders to determine the likelihood that an individual will pay back any money that is borrowed, and whether or not the individual should be offered a loan or credit line. In Washington, the most common credit scoring system used by lenders is the FICO score, which ranges from 300 to 850. Generally speaking, a higher FICO score indicates a lower risk, while a lower FICO score indicates a higher risk. Credit scores are also used by landlords, employers, and insurance companies to determine an individual’s eligibility for certain services. It is important to note that credit score is only one factor that lenders consider when making decisions. Other factors such as income, assets, and debt-to-income ratio are also important criteria that lenders use when approving loan applications.
Related FAQs
What is a co-branded credit card?What is a credit card annual fee?
What are the different kinds of interest rates for credit cards?
What is the Fair Credit Reporting Act?
When is a credit card issuer required to disclose the terms and conditions of a credit card?
What is a default on a credit card?
What is the Fair Debt Collection Practices Act?
How does a balance transfer work?
What is a chargeback fee?
What is Credit Card Act of 2009?
Related Blog Posts
The Basics of Credit Card Law: What You Need to Know - July 31, 2023The Pros and Cons of Credit Card Use - August 7, 2023
What Is the CARD Act and How Does It Impact You? - August 14, 2023
5 Tips for Understanding Credit Card Law - August 21, 2023
Understanding the FDCPA and Its Impact on Credit Card Law - August 28, 2023