Credit Score
Definition
A three-digit number (typically 300-850) that summarizes your creditworthiness. Based on your payment history, debt levels, credit age, credit mix, and recent applications. The higher the score, the better loan terms you'll get. Scores above 750 are considered excellent.
Why It Matters
Your credit score directly impacts interest rates you're offered. A 100-point difference can mean hundreds of thousands in extra interest on a mortgage over 30 years. Excellent credit gets 2-3% rates; poor credit gets 7-8%.
Example
A $300,000 mortgage at 3% costs $1,265/month. At 6% it costs $1,799/month. Same house, $534/month more ($191,700 more over 30 years) because of credit score differences. Build and maintain good credit.