Credit Score

A credit score is a numeric representation of an individual’s creditworthiness. The creditworthiness of a person tells us if he/she will be able to clear off his or her loans.

Defaulting on credit card bills and loan payments downgrades your credit score whereas being on time with all your credit payments keeps your credit score high. Banks use a credit score to decide if you qualify for a loan and the interest rate which should be charged for you. Therefore, if you have a low credit score, there are high chances you will be asked to pay a higher interest rate on a loan as compared to someone who has a higher credit score.

Leave a Comment