What is a credit score?

A credit score is a numerical representation of an individual's creditworthiness. It is a measure used by lenders and financial institutions to evaluate a person's ability to manage borrowed money and repay debts. Credit scores are typically calculated using information from credit reports, which include data on past and current credit accounts, payment history, and public records. The most commonly used credit scoring model is the FICO score, ranging from 300 to 850. A higher credit score indicates a lower credit risk, making it easier to secure loans, obtain favorable interest rates, and access better financial opportunities. It is essential to maintain a good credit score by making timely payments, lowering credit utilization, and managing credit responsibly.