Why Banks Look At Your Credit Score
When a bank reviews your application for credit, they want to answer one question--Will this person pay us back?
Your credit report and score helps them to understand your chances of successfully paying back your debt. A higher credit score means that you have been responsible with credit in the past and will most likely pay them back. If you have a higher score, then your credit application will most likely be approved and you will be rewarded with a lower interest rate.
A lower credit score means that you may have missed payments or stopped paying on some of your accounts. Banks can decide not to lend to you if your score is low. Or, they can approve your application and charge you with a higher interest rate because of your credit history.