What is a credit score?

A credit score is a numerical representation of an individual's creditworthiness based on their credit history. This score is calculated using information from a person's credit report, which includes data such as payment history, the amount of debt owed, the length of credit history, types of credit in use, and recent credit inquiries. Lenders use this score to evaluate the risk of lending money or extending credit to an individual. A higher credit score typically indicates that a borrower is more likely to repay debt responsibly, while a lower score may suggest that an individual poses a higher risk to lenders.

The other options do not accurately reflect what a credit score is. The first option mentions a measure of savings balance, which relates to an individual's savings account and not their creditworthiness. The third option describes a record of bank transactions, which primarily pertains to checking or savings accounts and has no direct connection to credit scoring. The fourth option refers to a calculation of total assets, which concerns net worth rather than an assessment of credit management. Thus, option B effectively captures the essence of what a credit score truly represents in personal finance.