It is important to keep track of your credit score because:

It is important to keep track of your credit score because:

A. A good credit score means you can borrow money at lower interest rates

B. A bad credit score means creditors can deny you a loan

c. Neither of these

D. Both of these

Answer: D. Both of these

A high credit score is desirable because it enables one to get loans at lower interest rates. Whenever you seek a loan, lenders will scrutinize your credit score and use it to assess how credible you are. The more your credit score, the less risky you look to lenders. Therefore, you will receive lower interest rates on loans and credit cards from lenders. This is cost-effective in the long term.

Contrastingly, a poor credit score indicates that you might find it difficult to secure approval for loans and credit cards. Applicants with low credit scores are deemed risky by lenders. They can either refuse your application altogether or give you a loan with high interest rates. This makes borrowing more expensive. Bad credit is an indication that you have poor payment habits, and often include late payments or defaults. You will continue to pay more for borrowing funds until your credit score gets better with time.

All in all, a favorable credit rating presents you with options that are cheap to borrow while an unfavorable one either precludes or results in costly interest charges. Monitoring and maintaining a good credit score is relevant because you may need to get low-cost financing at some point in your life.