What Is Credit Score?

A credit score is a three-digit figure that ranges from 300 to 850 and is used to determine your credit risk or the possibility of timely payment of your debts.

A credit score is a number that ranges from 300 to 850 and represents a person’s creditworthiness. A borrower’s credit score improves the way he or she appears to potential lenders. A credit score is calculated using information from your credit history. 

Credit History

This has to do with the number of accounts you have open, the total amount of debt you owe, and your repayment history, among other things. These sum up the data that will be used to generate your Credit scores by lenders to assess the likelihood of a borrower repaying a loan on time. Sometimes your monthly earning can be considered in calculating your credit score

Credit Score Ranges

Here is a general look at credit score ranges:

  • 300-579: Poor
  • 580-669: Fair
  • 670-739: Good
  • 740-799: Very good
  • 800-850: Excellent

How To Check Your Credit Score

Keeping tabs on your credit score is key to maintaining a good credit score that is favorable to you. In Nigeria, you will need to get in touch with a credit bureau like Firstcentral Credit Bureau, where you get to fill out the credit score checker form, and your credit score will be displayed instantly.

Things You Should Note

  • A credit score is important in determining whether or not a lender will grant credit.
  • Many banks and financial organizations use the FICO rating system.
  • Repayment history, loan kinds, credit history duration, and an individual’s total debt are all factors in credit score.
  • Credit usage, or the percentage of available credit that is currently being used, is one metric used in generating a credit score. 
  • Closing a credit account that isn’t being utilized isn’t always a good idea because it can affect a person’s credit score.

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