What is a credit score?

• Traditional credit scores range from 300–850. • The higher the number, the better the score. • The lower the number, the worse the score.

A credit score is a three-digit number that tells lenders how likely you are to pay back on time the money they loan you. This score follows you around for your entire life. It moves up and down over time, depending on what’s happening in your financial life. Maybe you’ve felt the roller-coaster effect at times.

When your score is high, you get the best credit deals. When it is low, you get the worst ones.

Your credit score sums up all the information on your credit report into one tidy number. This number is intended to reflect how well you manage money and credit, at the time you or anybody else requests it. Each credit-reporting agency has a private formula it uses to calculate your credit score.

Your credit score is also known as your FICO score. FICO stands for Fair Isaac, Inc., the name of the company that created the three-digit scoring system.

“Thin” Credit Histories

Many people often establish good payment histories—but by paying bills that the credit agencies don’t track. A lot of lenders know they are passing up good customers because of this. In response, the credit reporting agencies are beginning to offer new scoring systems for people who are just starting to establish credit, or people with “thin” credit histories. These new scoring systems are not widely used yet. Most lenders still use the FICO score to make their credit decisions. But, the new systems are worth knowing about. Ask your lender if it uses any of these scores.

Vantage Score	NextGen FICO® Score	FICO® Expansion® Score
Designed to create a more consistent score across all three credit scoring agencies. Score range: 501–990; assigns a letter grade to a range of scores to make them easier to understand. A: 901–990 (Super Prime) B: 801–900 (Prime Plus) C: 701–800 (Prime) D: 601–700 (Non-Prime) F: 501–600 (High Risk) Cost for getting the score: $5.95 Where you can get it: Experian	Also known under these names: Pinnacle (Equifax) PRECISION (TransUnion) Advanced Risk Score (Experian) Score range: 150–950	Not yet available to the public.

If you have a “thin” credit history, or are just beginning to establish credit, your best option is to check out Payment Reporting Builds Credit (PRBC). This credit reporting agency helps you establish credit through on-time monthly bill payments such as: • Rent • Utilities • Cable • Child care • Cell phone • Insurance • Payday loan repayments • Purchase payment plans

You can establish credit on the PRBC Web site in two ways: • With bills you’ve already paid. You will need to show evidence that you paid these bills (receipts, invoices, monthly statements, canceled checks). • With bills you pay online through the PRBC Web site. For more information on PRBC, visit www.prbc.com.