A credit score is a numerical representation of an individual’s creditworthiness. Lenders use it to determine loan eligibility, interest rates, and credit limits. A higher credit score increases the chances of loan approvals and better financial opportunities. Factors influencing credit scores include payment history, credit utilization, credit history length, types of credit, and recent inquiries. Paying bills on time, keeping credit utilization low, and maintaining long-term credit accounts can improve credit scores. Regularly checking credit reports for errors can help maintain financial health and avoid surprises when applying for loans or credit cards.
Understanding Credit Scores and How They Affect You
