Your credit score, also called a FICO score, is an actual number, between 300 and 850. The higher the number, the better: a score of 740 to 799 is considered very good, though the average is closer to 700. FICO is an acronym for Fair Isaac & Co., the company that is responsible for tabulating your credit score.
Each of the three main credit agencies – Experian, Equifax, and TransUnion – have a score for you based on your credit report at that individual agency. Each agency has more than 200 million files on people who have a credit history because they have used credit, and 4.5 billion are updated in those files every month. The agencies tend to have different information on the people they track, which means your credit report and score will vary from agency to agency.
That’s important because lenders believe that people who are creditworthy will pay back what they owe. That’s why better credit reports and higher credit scores make it easier, and cheaper, to borrow. It also makes it easier to rent an apartment or buy a house, get a job, buy insurance, and a number of other day-to-day essentials.