A credit score in the simplest of the terms is nothing but an analysis of a person's credit reports that represent the creditworthiness of the person and his financial status. The credit score is expressed numerically. The credit score or the numerical expression thus indicates the possibility of the repayment of debts of the person. Banks, financial institutions, credit card companies etc all typically use a credit score so as to evaluate the financial position of the person and the risk involved in lending loan to the concerned individual. Many of the lenders use credit score so that they can decide and negotiate on the interest rate and the credit limits too.

Now-a-days there are many prganizations such as telecom companies, government sections and other corporate departments that are employing these techniques. A credit score sometimes overlaps with data mining. This is mainly because most of the techniques that are used for data mining are used for credit scoring as well. Most of the countries like the United Kingdom and United States of America have conferences to discuss on matters of credit score and credit control. Different lenders follow different credit score methods. However if the applicant is denied credit, the lender needs to explain the reasons for the same. Because of the difference in the credit scoring methods, it becomes difficult for the individual to know in advance whether he or she will have enough credit score to receive the credit amount with a particular lender.

The most popular credit score technique that is used extensively is the logistic regression that predicts a typical binary outcome which indicated conditions such as bad debt or no bad debt. There are some financial institutions and some banks that also build a regression model that can predict the approximate amount of bad debt that an individual may incur. In the real sense, this is a much complicated method to predict the amount of bad debt and hence most financial institutions tend to focus only on the method of binary outcome.

In short, a credit score typically indicates whether or not a person will pay his bills or not, depending on the credit report analysis of that person. Usually when an individual requests for a free credit report, a credit score is available only after payment of a nominal fee.