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
Private Mortgage Insurance (PMI)
Insurance that protects lenders in case of mortgage default—typically required if the down payment is less than 20% of the home's purchase price.
Grace Period
A set amount of time after a payment is due during which a late fee will not be charged.
Home Equity
The current market value of a homeowner's property minus any outstanding mortgages or liens on the property.

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