ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A credit score is a numerical representation of the creditworthiness of an individual. In other words, it is an indicator of a person’s ability to repay debts/bills. Also called a credit rating, the financial history of an individual determines it.

Detailed explanation-2: -Creditworthiness = A measure of one’s ability and willingness to repay a loan. Credit rating/score = A measure of creditworthiness based on an analysis of the consumer’s financial history, often computed as a numerical score, using the FICO or other scoring systems to analyze the consumer’s credit.

Detailed explanation-3: -A credit score is a prediction of your credit behavior, such as how likely you are to pay a loan back on time, based on information from your credit reports.

Detailed explanation-4: -The FICO score is the most widely known score. Its main competitor is the VantageScore. Generally, they both use a credit score range of 300 to 850. Each company has several different versions of its scoring formula, too. The scoring models used most often are VantageScore 3.0 and FICO 8.

Detailed explanation-5: -A credit rating is a quantified assessment of the creditworthiness of a borrower in general terms or with respect to a financial obligation. Credit ratings determine whether a borrower is approved for credit as well as the interest rate at which it will be repaid.