Credit reports contain a great deal of information about how much money you’ve borrowed in the past, how much you’re borrowing now, and how you’ve paid it back. Credit scores are numbers, between 320 and 850, lenders use to summarize that information, making it faster and easier for lenders to decide how much money to lend you and how much interest to charge. There are a number of formulas used to calculate credit scores and, while they have a lot in common, they can have significantly different results. You don’t have control over which credit score formula a lender chooses to use, but it’s important for you to know that different formulas will result in different scores. It’s even more important, though, for you to know how the decisions you make impact your credit scores so lenders will trust you when you apply to borrow money.
Every lender is different, but This NerdWallet article describes the following guidelines: