How do lenders use credit scores?
Typically, when you apply for new or additional credit, lenders want to see how you have fulfilled your credit obligations in the past to help them determine if they should approve your request, and to help them determine your potential credit risk.
Lenders often use credit scores to help them determine your credit risk. Credit scores are calculated based on the information in your credit report. In most cases, higher credit scores represent lower risk to lenders when extending new or additional credit to a consumer. The credit score is an objective measurement of your credit risk at a particular point in time.
Lenders use credit scores along with a variety of other types of information -- such as data you provide on the credit application (for example, income, how long you have lived at your residence, other banking relationships you may have) in their loan evaluation process.