A lower score indicates to lenders that you are a credit risk, and you may not pay back the money you have borrowed. In order to offset the potential loss that a lender may incur by lending to you, the rates and fees offered to you are typically higher than those offered to people with good credit scores. That means, for the same purchase, you may be paying more than someone with a higher credit score. For example, a landlord may charge you a larger deposit in order to rent an apartment or, if you carry a balance on a credit card, your interest charges are higher.
Because building a good credit score requires a history of timely debt repayment, a good credit score indicates to lenders that you are likely to repay the money you borrow. As desirable customers, those with high credit scores are offered the lowest interest rates on different types of loans including automobiles, homes and credit cards. Potential employers may also view your credit report, however, employers do not check credit scores.