Credit Score

A credit score is a numerical value that represents an individual's creditworthiness. It is used extensively by lenders, financial institutions, and even some merchants to assess the likelihood that a person will repay borrowed money. The score is calculated based on an analysis of the individual's credit report, which includes their credit history, debt levels, repayment reliability, and other financial behaviors.

Components of a Credit Score:

Importance of Credit Scores:

Credit Score Ranges:

Understanding one's credit score is crucial for financial health. Individuals are encouraged to regularly check their credit scores and credit reports to ensure accuracy, spot potential fraud early, and understand how financial behaviors affect their scores. For merchants, knowing a customer's credit score helps in assessing the risk of extending credit, which can prevent financial losses from non-payment.