What exactly is a credit score, and why do we have one?
According to the Consumer Financial Protection Bureau, a credit score is a tool companies use to predict how likely you are to pay back a loan on time.
That score helps companies determine whether you are a safe bet to offer a loan to and if so, at what interest rate.
As financial expert Tori Dunlap puts it, your credit score is like your “adulting GPA. It’s like the best representation of how responsible financially you are as an adult.”
instead of determining which school you get into, or what academic scholarships you are eligible for, your credit score determines whether you can get things like a mortgage, auto loan, or certain credit cards.
This is where they came from, and how they evolved.