A numeric indicator of credit risk based on credit history and other factors.
For example, a business owner with a personal credit score of 720 is offered a 7.5% interest rate on an equipment loan, while a similar applicant with a score of 580 is either declined or offered the same loan at 14% — illustrating how credit score directly affects borrowing costs.
Why it matters: It dictates not only loan approval odds but also the interest rates and terms; a strong score saves tens of thousands of dollars over time.
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