Credit Scoring, also known as credit grading, is an unbiased way of determining a borrower's risk level. Values are associated with your personal financial attributes, such as your income, asset and debt levels, the length of time spent at your current address and current job, and your credit history. These scores are combined to give an overall credit score. The overall credit score is an indication of how likely a person with that score is to default on their loan.

The most widely known score is the FICO score.  It was developed by the  Fair Isaac Company and the three major credit bureaus. Your FICO score is a numeric value based on your credit history. It is generally used along with the other factors listed above to arrive at your lender's overall credit grade for you as a borrower.