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A number that lenders use to estimate how likely you are to repay borrowed money. It largely determines the interest rate you are offered.
Why It Matters
Credit score matters in an investing context mainly because it sets the APR on your debt — and APR is what decides whether paying a balance down is expensive to ignore. Two people borrowing the same amount for the same thing can be quoted very different rates based on score alone. Scores are produced by several different models, so the number varies depending on which one a lender pulls.
Key Points
- Lenders use it to set the APR you are offered.
- Different scoring models produce different numbers for the same person.
- US federal law entitles you to free credit reports from the major bureaus.
Related Terms
Common Questions
A number that lenders use to estimate how likely you are to repay borrowed money. It largely determines the interest rate you are offered. Credit score matters in an investing context mainly because it sets the APR on your debt — and APR is what decides whether paying a balance down is expensive to ignore. Two people borrowing the same amount for the same thing can be quoted very different rates based on score alone.
Credit score matters in an investing context mainly because it sets the APR on your debt — and APR is what decides whether paying a balance down is expensive to ignore. Two people borrowing the same amount for the same thing can be quoted very different rates based on score alone. Scores are produced by several different models, so the number varies depending on which one a lender pulls.
Lenders use it to set the APR you are offered.
Different scoring models produce different numbers for the same person.
US federal law entitles you to free credit reports from the major bureaus.