What are credit scores?

A credit score is like a report card that tells people how good you are at borrowing and paying back money.

Imagine you're going to a candy store. You want to buy lots of candy, but you don’t have enough coins right now. So, the store owner lets you take the candy first and promise to pay later. If you remember to give them the coins on time, they'll think you're responsible. But if you forget or run out of coins, they might not want to let you borrow again.

That’s what a credit score does, it helps lenders know how likely you are to pay back money you borrow.

Think of your credit score like a number that shows how well you’ve kept your promises. If you always pay on time, your score goes up. If you sometimes forget or don’t pay at all, your score might go down.

Lenders use this number to decide whether they want to lend you money, for things like a toy, a bike, or even a house when you're older!