What is a credit score?

A credit score is a three-digit number that reflects an individual's creditworthiness, specifically predicting the likelihood that they will repay borrowed money in a timely manner. This score is calculated based on various factors, including payment history, credit utilization, length of credit history, types of credit accounts, and recent credit inquiries. Lenders use this score to assess risk when deciding whether to extend credit, such as loans or credit cards, and to determine the terms of repayment, including interest rates.

The other options do not accurately define what a credit score is. For instance, net worth involves the total assets minus total liabilities of an individual, which is unrelated to the assessment of creditworthiness that a credit score provides. A record of bank transactions focuses on the flow of money through a person's bank account rather than their borrowing behavior. Furthermore, a summary of credit card spending habits analyzes how a person uses their credit cards but does not encapsulate the broader financial picture that the credit score aims to represent.