Personal Finance Tips
4 min read
Credit Score: The three-digit judge
A credit score is a three-digit number used by banks, NBFCs, and lenders to assess whether a person is eligible for a loan or line of credit. It was Bill Fair and Earl Isaac who founded Fair, Isaac, and Company in 1956, creating a standardized credit scoring system. It represents the level of credit risk a person poses. Despite its significance, many people have limited understanding of what a credit score is and how it fluctuates. Every individual is assigned a personal credit score, even within a marriage, indicating the risk associated with providing them a loan or line of credit. Credit scores typically range from 300 to 900, with higher scores indicating lower interest rates on repayments.