What is a credit score?

Lenders use credit scores to decide whether to approve loans or credit cards and what interest rate to charge. In the United States, the most widely used system is the FICO score, introduced in 1989, which ranges from 300 to 850. The biggest factors are payment history and the share of available credit being used, followed by the length of credit history, new applications and the mix of credit types. Paying bills on time and keeping card balances low are the most effective ways to improve a score. Other countries use different scales and agencies, and some have no single national score at all.