Krediidiskoora

Krediidiskoora, often referred to as a credit score in English, is a numerical representation of an individual's creditworthiness. It is calculated based on an individual's credit history, which includes information such as past borrowing and repayment behavior, the amount of debt owed, the length of credit history, and the types of credit used. Lenders, such as banks and credit card companies, use credit scores to assess the risk involved in lending money to an individual.

A higher credit score generally indicates a lower risk for lenders, suggesting that the individual is more likely to repay their debts on time. Conversely, a lower credit score may signal a higher risk, potentially leading to higher interest rates or even denial of credit. In many countries, credit scores are generated by credit bureaus, which collect and maintain consumer credit information. These scores are a crucial factor in decisions related to mortgages, car loans, credit card applications, and even rental agreements or insurance premiums. Maintaining a good credit score is important for financial health and can significantly impact an individual's ability to access favorable financial products and services.