What might a person with a poor credit score struggle with?

A person with a poor credit score is likely to struggle with obtaining loans or credit. Lenders use credit scores as a gauge of an individual's creditworthiness; a lower score typically suggests that the person has a higher risk of defaulting on loans. When someone applies for credit, such as a personal loan, mortgage, or credit card, lenders review the applicant's credit score and history. A poor credit score can lead to higher interest rates, less favorable loan terms, or outright denial of the credit application.

This connection between credit scores and lending practices makes it critical for individuals to maintain a good credit rating. Many lenders have minimum credit score requirements, and those with poor scores may find it challenging to qualify for loans, especially large amounts needed for significant life purchases like homes or vehicles. This aspect of financial management highlights the importance of credit in accessing necessary funds and establishing a solid financial foundation.