Credit evaluation is the process of assessing an individual's or business's creditworthiness. This assessment typically involves reviewing credit reports, which contain information about past borrowing and repayment behavior. Lenders use this information to determine the risk of lending money or extending credit. During credit evaluation, factors such as payment history, outstanding debts, and credit utilization are analyzed. A higher credit score often indicates a lower risk for lenders, making it easier for borrowers to secure loans or credit cards. Tools like credit scores and credit reports play a crucial role in this evaluation process.