Credit Report FAQ: What is a Credit Score?

Credit score is a dynamic number calculated by different credit bureaus utilizing their own algorithm that reflect your current credit standing based on your credit history. This might include your current outstanding payment, payment history and credit inquiry history. While the concept is similar, the information contained in the credit report varies across different countries and credit bureaus which in turn affect the algorithm of the credit score calculation.As an example, below is how TransUnion’s credit score calculated in the United States:

  • Payment history: 40%
  • Credit utilization: 20%
  • Length of credit history: 21%
  • Total amount of recently reported balances: 11%
  • New credit accounts are responsible for 5%

Source: TransUnion LLC. – note that the credit score is just a dynamic changing number that reflect the candidate’s current credit standing and it is likely to be changed overtime. For employment purposes, recruiters should consider different information in the credit report that might be related to the hiring decisions and industry compliance needs allowed by the local labor and privacy laws and regulations.