Credit Score

Definition

• A number, roughly between 300 and 800, that reflects the credit history detailed by a person's credit report. Lenders calculate this number with the assistance of computer systems as part of the process of assigning rates and terms to the loans they make.

Synonyms
FICO score, beacon score, credit worthiness

Related Terms and Acronyms

• Bad Credit — Definition,
  • Someone who carries a higher credit risk.
• Credit — Definition,
  • Money that a lender gives to a borrower on condition of repayment over a certain period.
• Credit History — Definition,
  • A record of an individual's or company's past borrowing patterns and whether or not debts were repaid on time.
• Credit Insurance — Definition,
  • Insurance that covers borrowers and/or lenders if one is unable to repay debts.
  • A policy that pays off the card debt should the borrower lose his job, die or become disabled. The structure of protection for a revolving credit card debt is calculated each month to cover only the debt that existed at the last billing cycle.
• Credit Rating (CR) — Acronym, Very Important,
  • A judgement of a person's ability to repay debts. The rating is often based on a person's current and projected income and past debt payment history. Also called a credit score.
  ➥ A metric to measure the credit worthiness of a debtor.
• Credit Report (CR) — Acronym, Very Important,
  • A report on a loan applicant's willingness and ability to make payments in a timely manner in the past. This report is provided to the bank by an outside agency.
  ➥ A report that outlines the credit worthiness of an individual or entity.
• Credit Worthiness — Definition,
  • How likely an individual or entity is to default on their debt.
• Equifax (EF) — Company Est. 1899, Canada, Important,
  • A major credit bureau company in Canada along with Trans Union.
• Experian (XP) — Company, Canada,
  • One of the Big Three credit bureaus, along with Equifax and Trans Union, Experian not normally used in Canada.
• Good Credit — Definition,
  • Someone who carries little credit risk.
• Joint Credit — Definition,
  • Credit that is issued to two people based their credit reports and their combined assets and incomes. The repayment of joint credit is the responsibility of both parties.
• Merged Credit Report — Definition,
  • A summary of one's credit history from the big two credit bureaus: Equifax and Trans Union.
• No Credit History — Definition,
  • To have no record of an individual's credit worthiness.
• No Money Down Mortgage — Definition, Important,
  • Available in Canada as a true 100% mortgage financing product.
• Secured Credit Card — Definition,
  • A credit card that a cardholder secures with a savings deposit to ensure payment of the outstanding balance if the cardholder defaults on payments. It is used by people new to credit, or people trying to rebuild their poor credit ratings.
• Unsecured Claim — Definition,
  • A claim or debt where the creditor has no guarantee of repayment because collateral is not required from the borrower. Credit is granted solely on an assessment of the debtor's future ability to repay the claim or debt.