A credit score is a numerical expression based on a statistical analysis of a person’s credit files that shows the creditworthiness of that person. A credit score is based on previous credit report information. In many countries like the USA, United Kingdom, Australia, they keep a record of an individual’s or company’s past borrowing and repaying, including information about late payments and bankruptcy. This information is keep in a organization, credit bureau (U.S.), or credit reference agency (UK).

This information is used by lenders such as credit card companies to determine an individual’s credit worthiness. Lenders like to see obligations paid on a monthly basis. Credit Score will determine whether lender will provide a loan or not, because it shows willingness to pay debt. Besides credit score, access to credit is determine by income. The higher the income, the more credit the consumer can access. Income shows ability to repay a debt.

These factors help lenders to determine the annual percentage rate (APR), grace period and other numbers of a loan.