Do only banks and lenders use credit scores?

Any institution that lends money – credit unions, banks, credit card companies, financing companies, mortgage lenders, and others – can use a credit score to help them assess whether you meet their lending criteria. These institutions use your credit score along with other relevant information provided by you, such as income, work status, and down payment amount. In general, higher scores allow access to more credit at competitive rates.

Insurance carriers can also use credit scores to help assess risk and to accurately price homeowners and automobile insurance policies.

Is credit score the only thing used by lenders for loan approval?

No, a credit score is just one part of several factors lenders use in their lending criteria. Other lending criteria considered may include:

• Loan-to-Value Ratio
• Income
• Current employment and work history