Who primarily uses credit scores?

Credit scores are primarily used by lenders to evaluate the risk associated with lending money to individuals. When applying for a loan, a mortgage, or a credit card, lenders review an applicant's credit score to assess their creditworthiness. A higher credit score indicates a history of responsible credit management, which suggests that the borrower is likely to repay the loan. Conversely, a lower score may indicate potential risks for the lender, leading them to either deny the loan or offer it with higher interest rates.

This use of credit scores helps lenders make informed decisions and manage their financial risk effectively. While other entities like insurance companies, employers, and retailers may consider credit scores for specific purposes, such as assessing risk for policies or evaluating a candidate’s financial responsibility, the primary and most common use of credit scores remains within the lending industry.