A credit score is a tool that lenders use to determine if they should give you a loan, mortgage or extend you credit. There are factors from your past measured in points, called a credit score at a particular time, which lenders use to predict how likely it is that you will repay a loan when it is due.
A credit score is a number, generally 300-850, assigned to you to rate how risky a borrower you are. The higher the score, the safer you are for creditors and they can give you better interest rate. Score 750-850 is considered excellent, 660-749 is considered good, 620-659 is considered fair and 350-619 is poor.
If you want the best loan, make sure your score is the highest it can be. Just remember, a poor score costs you more. Your future credit depends on your credit activity now. Review these scores at least three to six months before shopping for a loan so you'll have time to improve your credit score if you have to.
Here are some important ways to improve credit score:
What factors affect in credit score
1. 35% - past payment history
2. 30% - amount owed
3. 15% - length of history
4. 10% - types of credit in use
5. 10% - new credit