Why do I need to know my credit score?

Over 75 percent of mortgage lenders and 80 percent of the largest financial institutions use FICO scores in their evaluation and approvals process for credit applications."

While credit reports are a laundry list of your credit accounts, payment history and other information, your credit score - typically called a FICO score, named after the company that developed it, Fair Isaac & Company - is one number between 300 and 850. The higher your number, the better the chance you will make your loan payments and make them on time, lenders believe. It's much easier for lenders to look at this number than cull through your credit reports to come up with their own risk evaluation.

Although banks and other financial institutions have been using FICO scores for years, only in the past two years has the individual been allowed to learn his score. FICO resisted releasing scores for some time, afraid that consumers would use the data to artificially inflate their scores and thus make them less useful. However, pressure from Congress and consumer groups has changed that. But to most people, the revelation that they even have a FICO score is still news.

To clarify, other companies can provide you with their own versions of a credit score. However, FICO scores are above and beyond the most-used score. FICO is so big that it's used interchangeably with the term "credit score." Most people call credit scores a FICO score. Other companies' numbers can give you a sense of how your credit is viewed by lenders, but if you really want to know how lenders see you, you need to check your FICO score.