Lenders use your credit score to determine how likely you are to pay a loan back on time.
"You want those banks to be chasing after you to give you those better offers because that just puts you in the driver's seat for your financial life," says Chief Investment Officer Taylor Whelan of Whelan Financial in northwest Fresno.
Whether it's a loan or a line of credit, Whelan says high credit scores can give you the ability to borrow on better terms, including a lower interest rate.
"Every dollar that you don't pay in interest goes back into your pocket, that if you invest properly, you can turn it into more dollars for you," Whelan said.
Scores range from 300 to 850 and change depending on borrower behavior. Think payment history, credit utilization and length of credit history.
That data is maintained by three major US consumer reporting agencies: Equifax, TransUnion and Experian.
As of April 2025, the national average FICO score is 715, two points lower than a year ago, but still considered in the "good" range.
As for how to build credit, Kikoff CEO Cynthia Chen says credit history isn't exclusive to having a credit card.
"If you are a renter, you can get your rental history reported to the three major credit bureaus and get credit for that," she said.
Chen says one of the most common credit score myths is the belief that you need a high income for a high credit score. She says that's not true.
On-time bill payments, especially a perfect payment history on a mortgage, can also work in your favor.
"With hard work, consistent payment behaviors, they can have a good credit score well above 700," Chen said.
There are apps to monitor your credit, including Credit Karma.
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