Credit is money that a financial institution or business will allow someone to use to pay for goods or services before payment.
A credit score is a numerical representation of someone's credit history. This number shows the Risk of lending money and it Affects the interest rate offered to someone.
Someone's credit score will then become a rating. The higher your credit score, the higher your rating. The goal is to keep it at the numbers 650 and above for Fair-Excellent credit.
Credit Reporting Agencies collect information about your financial activity to generate your credit score and reports. There are 3 CRA's which are Experian, Equifax and Transunion.
There are 5 components that make up your credit score which are: your payment history, Amounts owed, Length of credit history, New credit, and The types of credit in use.
Credits:
Created with images by free pictures of money - "Money" • jarmoluk - "money card business" • cafecredit - "Credit Score - Blue" • cafecredit - "FICO Credit Score Range" • andibreit - "survey opinion research voting"