A credit score is a risk score of an individual's creditworthiness, which lenders use to evaluate the likelihood that a person will repay borrowed money. This score is typically based on information in the person's credit report, which includes their credit history, outstanding debts, payment history, length of credit history, and types of credit used.
Credit scores usually range from 300 to 850, with higher scores indicating lower risk to lenders. The most commonly used credit scoring models are FICO and VantageScore, and different lenders may have their criteria for determining acceptable credit scores for various credit products. A good credit score can help individuals secure loans with favorable terms, such as lower interest rates. In comparison, a poor credit score will result in higher rates or difficulty obtaining credit altogether.