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What is a credit score?

What is a credit score?

Individuals are forever on a spree to manage their wealth effectively and want to have control over their finances. In this process, it is of utmost importance to maintain creditworthiness. This means being in a financial position that makes one reliable enough to receive financial credit from a business credit advisor. This can judge majorly through past paying back money to creditors. The reason behind maintaining creditworthiness or rather the pros of doing so are immense. Among the plethora of benefits that a good credit score offers, the most important ones are higher eligibility for loans and credit cards, lower rates of interest, higher credit card limits, quicker loan approvals, added weight age to visa applications. Thus, it is important to maintain a good credit score throughout to get good credit opportunities.

Credit score

To shed some light on what is a good credit score, one needs to know what exactly meant by a credit score. A Credit score is a financial tool that helps lenders assess the creditworthiness of an individual. It used by lenders or banks to test the risk associated with providing credit to an individual, and hence; it shapes their decision regarding extending credit. 

Credit scores are only for individuals while another tool called credit rating is for businesses, organizations, governments. A Credit rating is a tool to measure creditworthiness for companies. There are various credit reporting agencies such as the Standard & Poor’s, Moody’s, and Fitch which assign credit ratings to companies from the range of AAA to D which signifies very good credit rating and poor credit rating, respectively.

Coming back to credit scores, there are three main credit reporting agencies in the United States, namely Equifax, Experian, and TransUnion, which assign the credit scores. These credit scores range from 300 to 850. It drives these scores using the FICO (Fair Isaac Corporation) credit scoring.

It should be noted that individuals don’t start directly with a good credit score. In fact, it builds a good credit score over time with the help of business credit advisor.

To get more information on credit, scores and credit ratings please visit website- https://007creditagent.com/

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What is a credit score?