CREDIT SCORE

 A person's creditworthiness, or chance of making timely payments on obligations, is indicated by their three-digit credit score. Lenders, like banks and credit card firms, use credit ratings to determine the risk of lending money to an individual.

 An individual's credit history, which includes their payment history, amount of debt owing, length of credit history, and types of credit used, is used to compute their credit scores. The FICO score, which has a range of 300 to 850, is the most widely used credit score model. Higher scores imply a decreased risk of default, increasing the likelihood of securing favourable interest rates and loan approval.

For several reasons, keeping a high credit score is crucial. A person with a good credit score may be more likely to be granted credit, such as loans and credit cards, as well as have better terms and lower interest rates. A low credit score, on the other hand, can make it challenging to get credit and lead to increased interest rates and costs.

 Make payments on schedule, keep credit card balances low, and refrain from creating too many new credit accounts at once if you want to keep your credit score high. Additionally, it's critical to frequently review credit reports for inconsistencies and to report any to the credit bureaus.

 

 There are actions one can take to raise their credit score if they have a poor one. This can entail settling debts, making timely payments, and lowering credit card balances. It's crucial to remember that raising your credit score requires time and effort; there are no fast cures.

In conclusion, credit scores matter when applying for credit because they might affect loan terms and interest rates. Making timely payments, minimising credit card balances, and refraining from opening too many new credit accounts at once are all important components of maintaining a decent credit score. It takes time and work to raise a poor credit score, but doing so may lead to better credit options down the road.

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