A credit score is a three-digit number calculated from your data-rich credit report and is a significant factor used by lenders to determine your creditworthiness.
Lenders use your credit report in order to judge your reliability as a loan candidate. Your credit report indicates your ability to handle debt responsibly and will help banks decide if you are a desirable loan customer.
A high credit score can help you lock in low annual percentage rate (APR) rates or secure special deals on loans. A bad credit report may prevent you from securing loans and can damage your ability to buy a car, open a credit card or rent a home.
A history of inability to manage your credit successfully will make lenders uncomfortable about trusting you with additional funds in the future.