A credit score is a number that shows how good you are at managing money and paying back loans. It’s very important in the financial system because it helps lenders, like banks or credit card companies, decide if they will give you money or a loan. It also helps them decide how much interest they will charge you. A credit score is a number between 300 and 850. The higher your score, the better you are at paying back money on time. A higher score means lenders are more likely to trust you with their money.
Here’s how credit scores work and how they are connected to the financial system:
