Credit scores simply explained
Let's start with the basics
Credit scores provide a snapshot of your financial health. Your credit score can affect everything from credit card limits to loans to your ability to rent an apartment or buy a home. Higher credit scores indicate that you are more credit worthy whereas lower credit scores suggests you may be a risky borrower.
Credit scores can differ depending on which credit bureau calculates your score. To simplify this confusion, the three main credit bureaus partnered together to create the VantageScore. LendingTree provides you with the most recent version of this credit score: VantageScore 3.0®.
How Your Score Is Calculated
Specific credit related behaviors, such as late payments, show up in your credit file as 'reason codes'. We simply call them “Reasons.” You can receive up to 5 good or bad reasons that explain why your score is what it is.
- Credit Score
- A credit score is a number generated by a statistical system used to rate the credit of an applicants according to various characteristics relating to... <a href='/glossary/what-is-credit-score' title='See the full definition of Credit Score'>read more</a>
- Credit Report
- A credit report is a report of an individual's credit history that a credit reporting company or credit repository prepares to determine a borrower's... <a href='/glossary/what-is-credit-report' title='See the full definition of Credit Report'>read more</a>
- Equal Credit Opportunity Act
- A federal law that requires lenders and other creditors to make credit equally available without discrimination based on race, color, religion,... <a href='/glossary/what-is-equal-credit-opportunity-act' title='See the full definition of Equal Credit Opportunity Act'>read more</a>
- Revolving Debt
- Revolving debt typically has a variable interest rate, an open-ended term and payments that are based on a percentage of the balance. <a href='/glossary/what-is-revolving-debt' title='See the full definition of Revolving Debt'>read more</a>
- Interest Rate
- Interest rate is the percentage of the loan that will be paid annually as the interest. <a href='/glossary/what-is-interest-rate' title='See the full definition of Interest Rate'>read more</a>
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