What is credit score ?
The credit score is a numerical measure of an individual's creditworthiness. It is calculated based on the information in credit reports, and lenders use it to assess the risk of lending money to someone.
Credit scores are perfect; they provide a good way for lenders to assess the risk of lending money to someone and make an informed decision. It also helps individuals access loans they would typically not be able to get (e.g., loans for homes or cars).
Credit score ranges from 300-850, with higher scores being better. The higher your credit score, the more likely you will be approved for a loan or mortgage that you want.
What is a good credit score?
The average credit score falls on a scale of 300 to 850. Scores below 600 are considered poor, while scores above 800 are excellent. Depending on the loan or credit you're applying for, your credit score may be more important than your income level.
A credit score is a representation of an individual's financial history. Scoring systems typically range from 300 to 850, two of the most common being FICO Score and VantageScore. Both models use similar information to generate your credit rating, but their classifications are different (for example, 665 on FICO would be considered fair while it's good under Vantage). Your data, including how you've handled debt and recent inquiries, will all contribute to generating your final score.
Both FICO and VantageScore credit scoring models use the 300-850 score range to assess your financial history. The two systems differ slightly in their classifications (e.g., "fair" on a FICO scale is considered good on a VantageScorescale). For example, 665 is classified as poor by FICOscore but fair by VantageScore's standards; however, you must know what each system defines as "good" versus "poor.""