A credit score is a form of report that tells lenders about a person's creditworthiness, meaning how likely an individual is going to pay back a loan based on his/her credit history. It is a number that summarizes credit risk, based on a snapshot of a credit report at a particular point in time. The credit score is calculated using the information in an individual's credit report and is used by a majority of top lenders.
Credit scores influence the credit that is available to a person and the terms (interest rate, etc.) that lenders may offer. When an individual applies for credit, be it a credit card, an auto loan or a mortgage, lenders would always want to know what level of risk they would be taking by loaning that money. When lenders order a credit report, they can as well request for a credit score that is based on the information in the report. A credit score helps lenders evaluate a credit report.
There are several credit score ranges. Most credit scores have a 300-850 score range. The higher the score, the lower the risk to lenders. A "good" credit score is considered to be in the 670-739 score range.
Investing Port has researched and would be outlining some tips on how to improve your credit score.
· Practice early repayment 35% of the time
Paying your loans early and not missing payments is the sure step you can take to improve your credit scores. Lenders often investigate an individual's repayment history to assess the likelihood of payment loans in the future. Repayment history can include payments of bills that are not actually loans, but which recur at intervals such as monthly utility bills.