Understanding Your Credit Score
Understanding Credit and Your Credit Score
What is Your Credit Score?
Your credit score is a three-digit number that primarily determines how much credit you are eligible for and what interest rate you will pay. Your credit score is a way to measure risk when loaning money.
Why Do Some People Pay More to Loan Money?
Lenders are willing to loan money to individuals with a history of paying in-full and on-time. The more likely you are to pay late, or worse not pay at all (default on a loan), the more it cost you to loan money.
If you have a history of paying every bill on-time and in-full, lenders know there is little risk of you not repaying or defaulting on the loan. Lenders also determine how much to loan you based on your previous loan amounts.
