A credit score is a three-digit number that shows lenders how reliable you are at borrowing and repaying money. Based off of information gathered from your financial history, Credit Reference Agencies (CRAs) will generate this three-digit score.
If you have a good score, then you will have more success being approved for credit cards, personal loans, and mortgages.
While CRAs are most known for producing credit scores, mortgage lenders will also generate their own internal credit scores. Lenders will have their own scores in some cases because they have a different formula and assign a different number of points for each of financial information.
By scoring borrowers differently, lenders show that credit scores provided by CRAs are only the starting point when assessing a borrower’s eligibility.
Your credit score is calculated based off of your financial history. This will include every credit agreement you have entered into individually or jointly.
If you have kept up with your payments on these credit agreements, then you likely will have a better credit score. However, if you have a history of missing payments, then this would negatively affect your credit score.
While higher is certainly better, there isn’t a sure-fire answer to this question. Partly this is due to each CRA having their own score ranges. For example, a good credit score from Experian would be 881 and above, while at Equifax a score of 420 would be considered good.