What is a credit score?

The essence of the score rating

Financial institutions use a scoring system to determine an applicant's creditworthiness, resulting in a credit score. This score takes into account several interrelated factors, such as previous credit transactions, personal information, and other circumstances.Your score is an evaluation that indicates how good a borrower you are and whether you have any late payments.The credit score is based on your credit history. If you don’t have a credit history, you also don’t have a credit score.What factors influence the calculation of a credit score?The main factors used in the calculation are:Payment history – If loans are repaid on time, the score is higher.Number of loans – Having too many loans indicates financial risk, resulting in a lower score.Loan amounts – Being heavily burdened with loans is also risky and lowers the score.Number of inquiries – Frequent credit inquiries can negatively impact the score.Length of credit history – The longer the credit history, the higher the score; conversely, a short credit history results in a lower score.How can you find out your credit score?The minimum credit score is 300, and the maximum is 850. The higher the score, the better the credit history. To find out your credit score, you need to contact the ACRA Credit Bureau. You can improve your credit score by repaying or reducing credit obligations, avoiding future late payments, and minimizing the number of loans.