What "credit score" means in finance

A credit score is a numerical representation of a person's creditworthiness and is used by lenders to evaluate the likelihood of the borrower repaying their debts on time. It is calculated based on the individual's credit history, payment history, outstanding debts, length of credit history, and other factors. Credit scores typically range from 300 to 850, with higher scores indicating better creditworthiness and a lower risk of defaulting on a loan. A good credit score is essential to qualify for loans and credit cards with favorable terms and lower interest rates.