A number, usually between 300 and 850, that tells lenders (like banks) how reliably you’ll pay back money you’ve borrowed. A higher score gives you lower interest rates on things like mortgages, car loans, and credit cards. Your score can also come up when renting an apartment or applying for certain jobs. More in How to Improve Your Credit Score.
Walk through the numbers
On a $30,000 car loan, a strong score might get a much lower interest rate than a weak one. Over five years that difference can be hundreds or thousands of dollars.
A better score makes borrowing cost less, which leaves more money to save and invest.
Related terms
For education only and not personalized investment advice. Examples are hypothetical illustrations, not a prediction or a promise of results. All investing involves risk, including the possible loss of principal.