What Is a Credit Score? Definition, Factors, Why it Matters

What Is a Credit Score?

By Kristi Waterworth – Updated Sep 13, 2025 at 4:56 PM EST

Key Points

Credit scores gauge how well you manage debt, crucial for rentals, phones, and other services.
Scores factor in payment history (35%), debt amount (30%), history length (15%), and more.
Ideal FICO scores range 670-739; below 580 may face high interest for credit approvals.

Credit is so important to modern life that everyone knows you must have a decent credit score to really function financially in society. But what is a credit score, and how does it work?

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a graphic defining credit scores and the fico scoring metrics — Image source: The Motley Fool

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About the Author

Kristi Waterworth has been a contributing real estate and financial expert at The Motley Fool, covering real estate, investing, and personal finance topics, since 2020. Kristi has been interviewed by various TV media outlets and podcasts for her real estate investing expertise – from residential real estate to digital real estate and everything in between. Kristi’s journalist career spans over 25 years, and she has written about real estate investing, homeownership, and home construction specifically for the last decade. She was also previously a licensed Realtor and general building contractor before the Great Recession and housing market collapse. She holds a bachelor’s degree in American history from Columbia College in Missouri.

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Kristi Waterworth has no position in any of the stocks mentioned. The Motley Fool recommends Fair Isaac. The Motley Fool has a disclosure policy.