What is a credit score?

A credit score serves as a numerical representation of an individual's creditworthiness, providing lenders with insight into how likely a person is to repay borrowed funds. This score is derived from various factors, including payment history, amounts owed, length of credit history, new credit inquiries, and types of credit used. The higher the credit score, the more favorable the terms are likely to be when applying for loans or credit cards, as it indicates a lower risk of defaulting on payments.

In contrast, the other options do not accurately define a credit score. Measures of public satisfaction relate more to consumer feedback and market sentiment, while rankings of investment portfolios assess the performance of financial assets rather than personal credit history. Assessments of financial market conditions involve analyzing economic indicators and trends, which are distinct from personal credit evaluations.