Credit scores have been around for so long, it’s hard to remember that they didn’t always play such a significant role in our financial lives. And if you’re like a lot of folks, the origins and utility of credit scores are still a mystery. So, let’s dig in and shed some light on the why and how of these methods for measuring creditworthiness.
A credit score is a three-digit number, generally ranging from 300 to 850, that represents an individual’s creditworthiness. Companies use credit scores to determine your credit risk and then use that information to decide whether to offer you a credit card, an auto loan, or a home mortgage. Your credit score doesn’t just determine yes or no on a loan; it can also determine the types of loans you can qualify for and how much interest you’ll have to pay.
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Brianne Angell 