Why do people need to have a credit score?
April 1st, 2011 - Posted by Tasha
Q: Why do people need to have a credit score?
A: Credit scores are used by potential lenders to determine if a person is creditworthy, or likely to pay their debts. It's essentially a way of distilling all the information in your credit file (ie, report) into a single number. Creditors then take that information, plus a variety of other factors such as your employment history and salary, into account when they decide whether or not to extend you a loan.
There are many different brands of credit scores out there, and each one uses it's own formula to calculate a score. The formulas are all secret, but you can learn more about the basic information in this previous blog post. If you're wondering what your credit score is, you can find out for free by signing up for one of our credit monitoring services with free trials, like IDENTITY GUARD® or Trusted ID.
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