What is a Credit Score?
A credit score is a numerical representation of an individual’s creditworthiness, typically ranging from 300 to 850. Lenders use this score to assess the risk of lending money to a borrower.
How Credit Scores Affect Financial Life
- Loan Approval: Higher scores lead to better loan terms.
- Interest Rates: Good credit results in lower interest rates on loans and credit cards.
- Employment and Housing: Some employers and landlords check credit scores before making decisions.
Tips to Improve Your Credit Score
- Pay Bills on Time
- Maintain Low Credit Utilization
- Regularly Review Credit Reports for Errors
- Avoid Excessive Debt and Hard Inquiries