JagInsights › Glossary › Credit score
What is a credit score?
A credit score is a number lenders use to price a loan. What moves it, in plain language, without a promise of a point change.
A credit score is a three-digit number a scoring company builds from your credit report. Lenders use it to decide whether to lend and what rate to charge. It is not a grade of whether you are good with money.
Worked example
Two people each want a $15,000 used-car loan. One score is 760 and one is 620. The 760 borrower is offered a lower APR. On a five-year loan the difference of a few percentage points is thousands of dollars. The score did not change the car. It changed the price of the loan.
Why it matters
The score is a price tag on future borrowing. Payment history and how much of your card limits you use move it more than clever tricks.
Questions people ask
What is a good score?
Lenders differ. Scores in the mid-700s and up are usually offered better rates. A score in the 600s can still be approved, at a higher APR.
Does checking my own score hurt it?
Looking at your own score through a service that uses a soft check does not. A lender's hard inquiry, when you apply for credit, can.
How fast does it change?
A paid-down card can show up in the next report, often within a month or two. A missed payment can stay on the report for years.
Educational information only. JagInsights is not a financial adviser, broker, or lender. See the Terms and Privacy Policy.