What is a Credit Score?
A credit score is a three-digit number (300-900) that represents your creditworthiness. It's based on your credit history and payment behavior.
Why Credit Score Matters
- Loan Approval: Higher score increases chances of approval
- Interest Rates: Better score = Lower interest rate
- Loan Amount: Higher score allows larger loan amounts
- Credit Cards: Affects credit card approval and limits
How to Improve Your Score
- Pay all bills on time (most important factor)
- Keep credit utilization below 30%
- Don't close old credit accounts
- Avoid hard inquiries
- Maintain a mix of credit types
- Dispute errors on your credit report
Score Ranges
- 300-500: Poor (High rejection risk)
- 500-650: Fair (Lower loan amounts)
- 650-750: Good (Most loans approved)
- 750-900: Excellent (Best rates)