A credit score is a numerical value used by the lenders in the US to determine the credit-worthiness of a borrower. A good credit score is an indication of the likeliness of the borrower to repay the debts owed by him/her. Along with a credit report, these credit scores help the lenders to assess the credit risks involved in lending a debt to a borrower. Today, credit scores are widely used by major banks, credit card companies and other credit lending companies across the US in addition to other information like income, employment nature, etc. that are related to the borrower. In addition to determining the credit risks in lending money to a borrower, these credit scores are used for many other financial assessment purposes like determining insurance prices for vehicles and homes, finding secure employment based on the employer’s credit report, renting suitable accommodation based on Landlord’s credit history, securing insurances, etc.

There are several bureaus across the US which generate the credit reports of all individuals and the scores generated by each of them may differ based on their assessment methods.

The FICO Score: These are the most common type of credit scores used today by most financial institutions. These scores were created in 1989 by the Fair Isaac Corporation are hence the name is short: FICO. Fico scores range from 850 to 300 indicating the creditworthiness of a person on a scale of good to bad. The FICO model is based on credit files of consumers generated by the three national credit bureaus: Experian, Equifax, and TransUnion. FICO scores differ for each individual for each category with the following breakup:

• 35% of the score is based on the payment history of the borrower that gets a drop in the score if there are any charges of bankruptcy, liens, judgments, settlements, charge-offs, repossessions, foreclosures, late payments, etc.
• 30% of the score depends on the debt burden owed through various accounts, the debt to limit ratio, loans installments, etc.
• 15% depends on the age of credit file. Older the credit history, the better for your score.
• 10% depends on the various types of credits used. Higher the number of credit types managed, the better.
• 10% is based on the history of recent credit searches. Fewer the number of searches, lesser the rejections from lenders the better for your building your score.

The different types of FICO scores are:
NextGen Risk Score: This is a scoring model that helps to assess a consumer credit risk. It was designed and introduced by the FICO Company in 2001. In comparison to the traditional FICO scores, a relative increase in the number of accounts and a simultaneous decrease in the number of bad, charge-off, and Bankrupt accounts was expressed by the NextGen scores. These scores range between 150 and 950.
FAKO scores: These are also called as “educational” credit scores as these are credit scores used for educational use only. However, there are further divisions within these scores:

• Experian has the Plus Score ranging between 330 and 830 and the Scorex PLUS score that ranges between 300 and 900.
• The Equifax Credit Score ranges between 280 and 850.

SBSS score: The Small Business Scoring Service score is a model developed by FICO to evaluate the personal credit report of small business credit applicants. The score range is 0–300.
VantageScore: This scoring model was jointly created by the three major credit-reporting agencies in 2006 in a bid to increase their market share from 6% and win business from FICO. Although a score range from 501 to 990 was created initially, the VantageScore version 3.0 uses a score range of 300–850 since 2013.
CE Score: This credit scoring model was published by CE Analytics and hence the name. The licenses of using these were issued to sites such as Community Empower and iQualifier.com. This score is distributed to 6,500 lenders through the Credit Plus network; however, it remains free to consumers and works on a band of 350 to 850.
Other Non-FICO scores: There are several other non-FICO scores that are created by the National bureaus and are used by several lenders. Some are:

• TransUnion’s TransRisk New Account Score in the website Credit Karma is between 300 and 850.
• Experian National Equivalency Score in Credit Sesame and Credit.com ranges from 360 to 840.
• Application Score of between 100 and 990.
• Credit Optics Score by ID Analytics of between 1 and 999.

There are yet different credit scores offered to consumers by several websites (TransUnion, Equifax, Credit Karma, Credit Sesame, etc.) that are not used by lenders. Some of them are:

• Chex Systems Consumer Score ranges from 100 to 899.
• PRBC credit score from 100 to 850.
• LexisNexis Attract Insurance Score from under 500 to 997.