What does credit score mean?
The likelihood of a borrower being able to repay a loan is highly dependent on his or her credit score, and this is of much interest to a lender. Credit scores are numerical values which, based on a consumer’s credit history, defines if you are worthy of getting the loan that you apply for. Ranging from 1,000-2,000, the greater your credit score – which equals a better risk grade or rating – the more you are considered financially reliable.
Why your credit score is important
The importance of credit scores cannot be overemphasised as they are vital in the application of any financial product from financial institutions, ranging from mortgage or car loans to even bank cards. These scores are used to assess the reliability of your financial footing by financial institutions, banks and even firms, as they can reasonably gauge the risks involved by granting you a loan.