A credit score is a three-digit number that represents a person's creditworthiness-how likely they are to repay a loan or make payments on time based on their credit history. It is calculated using information from credit reports, which include details such as payment history, outstanding debt, length of credit history, types of credit accounts, and recent credit inquiries
. Credit scores typically range from 300 to 850, with higher scores indicating better creditworthiness. A higher credit score generally makes it easier to qualify for loans, credit cards, and other credit products, often resulting in lower interest rates and better terms. Conversely, a lower score may make it harder to get credit and lead to higher borrowing costs
. Different scoring models exist, with the FICO score being the most widely used by lenders in the United States. Scores can vary depending on the model used and the type of credit being applied for. Credit scores are used not only by banks and lenders but also by landlords, insurance companies, and other service providers to assess financial risk
. In summary, a credit score is a key financial indicator that helps lenders and other businesses evaluate the risk of lending money or offering services to an individual based on their past credit behavior
