What does my credit score actually measure

Your credit score measures how reliably you repay borrowed money, expressed as a number typically between 300 and 850. It's calculated using five main factors: payment history (whether you pay on time, about 35% of the score), amounts owed relative to your credit limits (about 30%), length of credit history (15%), mix of credit types like cards and loans (10%), and new credit inquiries (10%). Essentially it predicts the statistical likelihood that you'll default on a loan within the next two years. Lenders use it to decide whether to approve you and what interest rate to charge. A higher score signals lower risk to lenders, which translates to better loan terms and lower borrowing costs for you.