Credit ScoresBalancing Credit and Debt to Maintain

Credit Worthiness

A numerical expression of a person’s credit-worthiness

Based on a formulaic calculation by different rating agencies

Rating agencies◦ Experian◦ Equifax◦ Transunion

May contact these agencies when there is a discrepancy between reported score and actual financial activity

Credit Score

Credit Score Scale

-Provides lenders with a rating system for

determining rates for a potential customer

Average score is “Fair” for American – primarily a result of the typical

negative savings rate for most Americans.

Influences on Individual Credit Score

Breakdown of RatesMany people have what is

considered to be “good” credit