A credit score is a 3-digit number used to rate your behavior with credit and debt. This number changes over time as you open and close credit accounts, use credit available to you and make payments. Lenders use your credit score when considering how risky it is to lend money to you.

The concept of a credit score may feel complicated, but in essence it looks simply at your payment history, amount of debt, how long you have had debt and how many recent applications you have made for credit accounts. Information about these items are reported to the three credit bureaus, Experian, TransUnion and Equifax, who compile your credit report. The information on your credit report is used to calculate your credit score.

Your three-digit credit score captures your experiences with credit and debt and can help you track changes in your financial history over time, from the very first debt you encounter—such as the credit card you opened in college—up to the present. Credit score is a powerful tool that signals to prospective lenders your ability to make payments in a timely manner.