how does credit score work

A credit score is a three-digit number, typically ranging from 300 to 850, that assesses your creditworthiness for lenders. It is calculated by credit bureaus based on the information in your credit report. The key factors influencing your score include your payment history (paying bills on time is most important), the amount of debt you owe compared to your available credit, the length of your credit history, the types of credit you use, and how often you apply for new credit. A higher score improves your chances of getting loans and securing favorable interest rates.