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Credit Score History
The credit scoring system was created more than 100 years ago but didn't become
prevalent until the 1980's. That's when lenders began using it to evaluate a potential
borrower's creditworthiness. Today, credit scoring is also used by insurers, landlords,
employers, utility companies and even judges to evaluate payment behavior.
What is a credit score?
Your credit score is a number generated by a mathematical formula using data from
your credit report. This number is used by lenders to determine how likely you are
to repay your loans.
Want to get your credit score?
Order your report today.
What factors influence a credit score?
- Payment history
- Total outstanding debt amount
- Length of credit history
- Severity and frequency of negative information (e.g., collections)
- The percent of credit used compared to credit available
How does my credit score affect me?
Your credit score is an indicator of your financial "health." Lenders use your credit
score to determine:
- Whether to give you a loan
- What interest rate you will pay (called "risk-based pricing")
What is a "good" credit score?
Typically, the higher the score, the better. There are different scoring models
lenders can choose to use, and each lender decides what credit score range it considers
to be a "good" credit risk. Note: A credit score is only one component of the information
evaluated by UW Credit Union.
Watch for upcoming credit education articles that discuss credit myths, how to repair
damaged credit, how to create a credit history, and more.