What do you mean by Credit? Credit can be defined as a certain amount of money that is provided to you by the lender. It depends upon the amount of money you have asked for that whether the lender is going to perform a background check on you or not. When he decides to perform a background check on you, this is the time when your credit report and credit report score come into the picture.

Your credit report score is calculated by Credit Bureaus. The things that they take under consideration are: -

Current Debts
Balance
Payment history
Other things that are included in this report are:

Mortgage Loans
Credit Cards
Auto Loans
Bankruptcies
This information is passed on to the lenders by the credit bureaus and they use it to finalize their decision whether you are a low or high risk borrower. The interest rate of your loan is different for low risk and high risk borrower. If you have a high credit score you are a low risk borrower and if you have a low credit score then you are a high-risk borrower. Generally a good credit score is about 700 and above.

For more information on credit scores visit - credit reports and scores

The author is a freelance writer and associated with http://government-free-credit-report.net