A credit score is a portrait of someone’s credit history, valued as a round number between 300 and 850. Your score is used primarily by creditors as a way of determining how likely you are to pay off your debts. This, in turn, determines what kind of loans will be available to you.

There are five factors that go into determining a person’s credit score: payment history, amounts owed, length of credit history, types of credit, and new credit. By effectively managing these categories and paying off all of your debts on time, you are in full control of your credit score and will be much more likely to be approved for a loan with favorable terms when the time comes.

Watch the full video explanation here.

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