New Delhi, Feb. 11 -- Acredit scoreis a three digit number. It typically ranges from 300 to 850. A figure between these two digits predicts an individual's creditworthiness and summarizes his or her credit history.

Lenders use this score to analyze the risk of lending a borrower with funds. A higher score indicates a lower risk and increases one's chances of loan approval with lower interest rates and favorable terms. Therefore, understanding how credit scores are calculated can help a borrower in building and maintaining a good credit history.

Several factors join in to influence an individual's credit score. Payment history and amount owned being the most significant. Now payment history accounts for about 35% of one's FICO score and ...