You just want to get a loan and suddenly you are bombarded with all this questions about your credit score. And you dont really know what to answer since you dont even know what a credit score is.
A credit score is your credit grade, representing how much of a good creditor you are. This score is dependent upon your credit history and credit report information, which is gotten from credit bureaus and credit reference agencies such as Equifax and TransUnion. Banks, credit card companies and lending companies use the credit score to have an idea if a person will pay what they borrowed in time. These scores will help these companies calculate their risk and determine if you will be lent to or not.
Another use for the credit score is to determine how many percent interest rates will be given to the borrower and what will be the terms of payment. People with high credit scores will be given more time frame to pay their debts and much lower interest rates.
A person with a not so good credit score may be given shorter terms in their payments but high interest rates. This is because they are riskier to lend money to so the banks and lending companies would want...
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