A credit score is a number, generally between 300-850. Your credit score plays a vital role when
lenders decide whether to extend you credit.
What are the problems associated with credit scoring?
Sub-prime lending individuals with higher credit scores are offered different services than those with lower scores.
Individuals with lower credit scores are targeted with sub-prime loans
with higher interest rates.
Individuals in the top credit score tier, +720, will generally pay 5.546 percent for a $100,000 mortgage carrying a monthly payment of $572.
Individuals with a credit score under 559 will pay 7.945 percent on the
same mortgage, carrying a monthly payment of $730.
You credit score is one of the important factors that would affect your financial life. Your credit score sums all the account data on your credit history and expresses it as a score.A credit score is a numerical expression based on a statistical analysis of a person's credit files, to represent the creditworthiness of that person. A credit score is primarily based on credit report information typically sourced from credit bureaus.
Why are credit and credit score so important?
Financial institutions take into consideration your credit worthiness before giving you access to a loan and the way to determine this is by your numbers. The financial institutions are not the only ones looking into your reports; insurance agents and employers also look at your scores to make a decision on you.