Your credit score is the foundation of your financial identity, it’s the number used by lenders as an indicator of how likely you are to repay your debts. It’s a rating that reflects your financial habits and credit history, which financial institutions use to assess your risk as a credit applicant.
Per TransUnion Philippines, a credit score is rated from 300 to 950, with 950 being the highest. This means that the higher your score, the better. These five factors impact your score:
When you have a low credit score, it will be difficult for you to get credit in times of emergencies or financial distress, and you will be subjected to higher interest rates when you apply for a loan (e.g. car loan, housing loan, personal loan), pushing you deeper into debt.
To avoid this from happening, make sure you do the following: