“Credit scores are not the same as credit reports. A credit report basically represents your financial history over time, whereas a credit score is a snapshot of your credit profile at a particular time. Scores are not stored in your file. Rather, they are generated on request and can change from day to day, depending on the latest information in your file,” reports The Los Angeles Times.

“Much like the bell curve, which can be used to grade students according to how well the class does as a whole, a credit score measures the relative risk a potential borrower represents as ranked against all others whose profiles are stored within a particular credit bureau’s files. And many businesses and creditors — not just mortgage companies — use them to determine not only what you’ll be charged, but also whether your business is wanted at all.

“Consumer understanding of credit scores has improved somewhat since the first CFA-Providian study in July 2004. But according to the latest poll conducted in August on their behalf by the Opinion Research Corp., fewer than one in three people realize that a score measures their risk to the creditor.”