What is a credit score and how does it impact my ability to get a loan?

A credit score is a three-digit number that is used to predict how likely you are to repay debt. Your credit score is based on your credit history, which includes your credit card and loan balances, payment history, and other factors. A good credit score is typically between 670 and 739, while a score above 740 is considered excellent.

When you apply for a loan, lenders use your credit score to determine if you are a high or low-risk borrower. A high credit score means you are more likely to repay the loan on time and as a result, lenders may offer you lower interest rates and better loan terms. On the other hand, a low credit score can lead to higher interest rates or even a loan denial.