What Is a Credit Score? - A credit score is a number that measures how likely you are to repay your debts, such as loans and credit cards. It is based on your credit history, which includes information such as your payment history, the amount of debt you have, the length of your credit history, the types of credit you use, and how often you apply for new credit. Lenders use your credit score to decide whether to approve you for credit products and what interest rates to charge you.
A higher credit score means you are more creditworthy and can get better terms from lenders. A lower credit score means you are less creditworthy and may have difficulty getting credit or pay higher interest rates
There are different models and methods to calculate credit scores, but the most widely used one is the FICO Score, which ranges from 300 to 850. The FICO Score is calculated by a company called FICO, formerly known as Fair Isaac Corp. The FICO Score is used by most lenders in the U.S. and other countries
Another common credit score model is the VantageScore, which also ranges from 300 to 850. The VantageScore is calculated by three major credit bureaus in the U.S.: Equifax, Experian, and TransUnion. The VantageScore is used by some lenders and other organizations, such as credit card companies, utility companies, and landlords
Your credit score can change over time, depending on your credit behavior and the information in your credit reports. You can improve your credit score by paying your bills on time, keeping your debt levels low, using a mix of different types of credit, and avoiding applying for too many new credit accounts in a short period of time. You can also check your credit reports regularly and dispute any errors or inaccuracies that may affect your credit score
You can get a free copy of your credit reports from each of the three major credit bureaus once every 12 months through CreditReport.com. You can also get a free credit score from some websites, such as NerdWallet, or from some of your credit card issuers or lenders. However, keep in mind that the credit score you see may not be the same as the one used by lenders, as different sources may use different models or methods to calculate your score
I hope this helps you understand what a credit score is and why it is important. ....😊