The Minnesota Attorney General's Office recommends that consumers be aware of how their credit is scored or rated by credit reporting agencies. Credit scores are three-digit numbers used by credit bureaus based on a consumer's debt profile and credit history. Creditors use these credit scores to determine if consumers are eligible for credit and at what interest rate they may receive a mortgage or other form of credit.
Most consumers have a prime credit score, which lenders see as a low risk.
However, nearly a third of all consumers are considered subprime. Subprime consumers get higher interest rates and loan fees. Since lenders and credit bureaus may know much more than you about your ability to obtain credit, it is important to pay close attention to certain factors affecting your credit score. Credit scoring models are confusing and vary among creditors. These models help creditors determine whether you are prime or subprime.