Creditors use credit scoring to evaluate your credit record and predict if you'll pay off your loans on time. A credit score is the main reason a creditor decides whether to grant you credit and how much credit to grant you. The score also helps the creditor decide terms of the loan, such as what interest rate to charge you.

High credit scores don't guarantee a good loan. You are not guaranteed low interest rates or low fees just because you have a high score. Likewise, a low credit score doesn't keep you from qualifying for good loans.Always shop around and compare all costs, including rates and fees.

Creditors also evaluate the rest of your credit report. But many credit decisions that are made very quickly are based mostly on your credit score. This is often true for credit card applications, for example.

Credit scores can also be used when you are applying for a job, employment, or insurance. It is important to review your credit report for any credit reporting errors.

A lender is required to disclose if they are denying your application or not giving you a good loan because of your credit score. The lender is required to tell you the score that they used as well as key factors that went into their decision.