How Are Consumer Credit Scores Calculated

A CREDIT SCORE IS A PREDICTION OF CONSUMER CREDIT BEHAVIOR based on information from credit reports. These three-digit numbers, typically between 300 and 850, are designed to represent a consumer's credit risk, or the likelihood they will pay their bills on time. Credit scores play an important role in the financial lives of consumers because creditors and lenders consider a consumer's credit score as one factor when deciding whether to approve an individual for a new account. Credit scores may also impact the interest rate and other terms on any loan or other credit account for which one qualifies.

Importantly, credit scores cannot be calculated without credit history. Score providers, like VantageScore and FICO, do not have access to the consumer data, consumer credit files, or any other files containing personal information about consumers maintained by the Nationwide Consumer Reporting Agencies (NCRAs).

Banks, credit card companies, mortgage and auto lenders, debt collectors, some landlords and other companies that consumers have a relationship with send credit and account data to the NCRAs like Equifax. The NCRAs receive, compile and standardize the data provided by these companies, with the information then becoming the basis of a consumer's credit report.

Equifax obtains, processes, validates and secures the data that makes credit scores possible with the expertise gained over decades of this highly-regulated work. We adhere to our regulatory and legal obligations across thousands of data furnishers, supporting updates and changes to the credit file on a daily basis with a technology, data, and security infrastructure built on our industry's largest cloud transformation and a multi-year, more than $3B investment. In 2024 alone, we maintained information on more than 3.5 billion tradelines with information for more than 245 million consumers.

Aparna Shah, who leads the Direct to Consumer Business at Equifax, explains further in this video where a consumer's credit data comes from and how consumer credit scores are calculated today.

Equifax encourages consumers to review their credit report regularly, which they can do via myEquifax or the myEquifax™ mobile app, which offers consumers a convenient, on-the-go way to monitor their financial health.

Download the myEquifax™ mobile app here.