New Delhi, Oct. 27 -- A good credit score can improve your chances of getting a home loan, personal loan or credit card at competitive interest rates. However, several misconceptions about how credit scores work can lead borrowers to make mistakes that affect their financial health.

Many people believe that checking their credit score frequently can lower it, while others assume that a higher salary automatically translates into a better score. Some also believe that having an excellent credit score guarantees loan approval. Understanding how credit scores actually work can help borrowers make better financial decisions.

A credit score typically ranges from 300 to 900, with a higher score generally indicating stronger creditworthiness. ...