What is a credit score?

A credit score is a three-digit number ranging from 300-850 that evaluates an individual’s credit risk. Credit scores are used by lenders and other financial institutions to help evaluate an individual’s creditworthiness. This score is generated from a person’s credit report- a detailed report of their credit history. Credit reports are compiled by the three major credit bureaus (Experian, TransUnion, and Equifax) and contain information such as open credit accounts, loan history, payment history, and any public records related to their credit. The credit score is determined based on weighted factors of payment history, amounts owed, length of credit history, new credit, and types of credit used. Payment history and amounts owed have the most significant impact on an individual’s credit score. Payment history includes whether all payments were made on time and how many times any payments were late. Amounts owed is a measure of how much total debt an individual has. Having a high credit score is beneficial in Florida because it can help individuals access credit at low interest rates, and even get approved for better credit cards with more favorable rates and perks. It is important to understand and monitor one’s credit score. This can be done by checking one’s credit report regularly and reporting any inaccuracies or fraudulent activity. People should also try to pay bills on time and keep their amounts owed low.

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