How can a credit score be defined?

A credit score can be defined as a numerical representation of a borrower's creditworthiness. This score is calculated based on various factors in a person’s credit history, including payment history, amounts owed, length of credit history, new credit, and types of credit used. The score generally ranges from 300 to 850, with higher scores indicating better creditworthiness. Lenders use this score to evaluate the risk of lending money or extending credit to an individual, as it helps predict the likelihood that the borrower will repay their debts.

In contrast, the other options provide inaccurate definitions. The first option related to measuring a person's overall income does not capture the complexity or the intent of a credit score, as credit scores are not based on income but rather on credit behavior. The score related to spending habits misses the broader perspective of creditworthiness, which also considers how debts are managed and repaid. Finally, the option regarding a system to track all financial transactions describes more of a financial monitoring system or spending analysis rather than the specific purpose and nature of a credit score.