Why Is a Credit Score Important?
A credit score is a number that lenders use to determine a borrower’s creditworthiness. A good credit score means a lower chance of being approved for a loan, while a bad credit score means a higher chance of being approved.
There are three main credit bureaus in the United States: Equifax, Experian, and TransUnion. Each bureau has its own credit score. Your credit score is based on your credit history, which includes the amounts you’ve borrowed, the terms of those loans, and the payments you’ve made on time.
Your credit score is also based on your credit utilization ratio, or how much of your available credit you’re using. The lower your credit utilization ratio, the better.
Your credit score is a number that lenders use to determine a borrower’s creditworthiness. A good credit score means a lower chance of being approved for a loan, while a bad credit score means a higher chance of being approved.
There are three main credit bureaus in the United States: Equifax, Experian, and TransUnion. Each bureau has its own credit score. Your credit score is based on your credit history, which includes the amounts you’ve borrowed, the terms of those loans, and the payments you’ve made on time.
Your credit score is also based on your credit utilization ratio, or how much of your available credit you’re using. The lower your credit utilization ratio, the better.
Credit scores are important because they are one factor in a credit evaluation. A good credit score means that you are a low-risk borrower and that lenders are more likely to give you a loan. A bad credit score means that you are a high-risk borrower and that lenders are more likely to charge you high interest rates and refuse to give you a loan.
