Credit Score
A numerical representation of an individual's creditworthiness, used by lenders to determine the likelihood of repayment.
More Details
A credit score is a numerical representation of an individual’s creditworthiness, or the likelihood that they will be able to pay back the money they borrow. Credit scores are used by lenders, landlords, and other financial institutions to assess the risk of lending individuals money or extending credit to them.
Example
If you have a credit score of 850 (perfect), it demonstrates that you have had a lengthy history of timely payments, credit utilization, and a mix of various types of credits.
Related Terms
Interest Rate
A percentage of a loan or deposit balance that is charged by a lender or financial institution for the use of its money.
Compound Interest
Interest calculated on the sum of a principal and accumulated interest from previous periods.
Amortization
The process of paying off a loan through regular installments, the amount of which is determined by the loan amount, length, and interest rate.

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