A credit score is a number that is calculated based on a computer analysis of your credit files. The number is used to “score” your creditworthiness—or the likelihood that you will pay your debts in a timely manner. A credit score is primarily based on credit report information, typically sourced from credit bureaus and credit reporting agencies. Lenders, such as banks and credit card companies, use credit scores to evaluate how big of a risk they are taking on before lending money to you. Obviously, a bank wants to make sure they get paid back. They use your credit score to help decide how big of a risk you present to them. Banks also use credit scores to determine who qualifies for a loan, at what interest rate, and what credit limits. Credit scores are used for other purposes as well. Some banks use credit scores to decide if they should open a new checking account for you. Some insurance companies use your credit score to decide if you can get an insurance policy. Its frightening, but some employers even use your credit score when deciding whether to hire you! Having a good credit score is very important in today’s society.
ChexSystems does not include a credit score. ChexSystems only reports negative information about you—there is no score for being a “good” checking account user.
Related Terms: Free Annual Credit Report