Numbers have different meanings. In school, you are given an A if you excel in a particular subject. In the real world, a 600 or 700 could have an effect on your ability to get a loan. This is called your credit score and to give you an idea, here is an explanation.
The credit score is an indicator that tells lenders if you will be able to pay the amount that will be loaned to you. The scale goes from 340 to 750 and the higher it is, the less risk the lending institution is taking because they know you will be able to pay for it with interest.
If your score is below 700, you can still apply for loan but expect to pay at a higher interest rate as this is the only way that the lending institution can be sure you will be able to pay them back.
Your credit score is calculated based on several factors. Thirty-five percent of the total score is based on your credit history. You could get a perfect score here or have a few deductions if ever you have had any late payments or bankruptcies. The more recent it is, the greater the deduction.
Thirty percent is based on outstanding debt. This may come from car or home loans, credit cards bills and utilities....
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