Ace Your EPF Honors Essentials in 2026 - Elevate Your Skills and Shine!

The credit score is a numerical representation of an individual's creditworthiness, calculated based on various factors including payment history, amounts owed, length of credit history, types of credit in use, and new credit inquiries. Lenders use the credit score to assess the risk of lending to a borrower. A higher credit score typically indicates a lower risk and, therefore, a higher likelihood of being approved for loans or receiving favorable terms such as lower interest rates.

In contrast, the debt-to-income ratio assesses an individual's ability to manage monthly debt payments relative to their income, which is a separate measure used to determine financial health but not a direct measure of creditworthiness. Investment return relates to the profit earned on investments and is not relevant to credit assessment, while the loan-to-value ratio is used primarily in mortgage lending to assess the size of a loan compared to the value of the property, which also does not directly reflect an individual’s creditworthiness.