Credit Score

A Credit score is a numerical representation of a person’s creditworthiness, typically ranging from 300 to 850. It is based on the information in an individual’s Credit Report, which includes their credit history, outstanding debts, payment history, types of credit accounts, and recent credit inquiries. Lenders use credit scores to evaluate the likelihood that a borrower will repay their debts.

For example, a credit score of 720 is generally considered good, indicating that the individual is likely to repay loans on time. In contrast, a score of 580 may be seen as poor, suggesting higher risk to lenders.

In a case where an individual has a high credit score, they may qualify for lower interest rates on mortgages or personal loans. Conversely, someone with a low credit score might be denied credit or offered loans with higher interest rates to offset the risk of default.