5 times your credit score matters most

Your credit score is a numerical indicator of how likely you are to repay loans in a responsible and timely manner. A low score means lenders will probably be less willing to extend you credit. Here are five instances when a credit score really matters:

You need a new car

If you have to buy a new car — or even a used one — your credit score will be pivotal to the transaction. Yes, you can get approved for an auto loan with less-than-perfect credit, but if your credit score isn't good, you'll probably end up paying a significantly higher interest rate.

You want to buy a home

Your ability to take out a loan for a home depends on a variety of factors: your debt-to-income ratio, loan-to-value ratio, missed payments and more. But err on the side of caution, and take steps to boost your credit score so that it's in the 720-740 range. Otherwise, you might face higher interest rates.

You want to rent an apartment

It's not quite as critical as it is with a mortgage, but a bad credit score can make it difficult for you to be approved for a lease. In many markets, the best apartments are in high demand. A higher score suggests to a landlord that you're likely to pay your rent on time.

Insurance companies devise their own scoring models based on the information included in your credit report. This information is used to arrive at a proprietary score that's intended to indicate how likely you are to ever make an auto insurance claim.

You start your own business

Your business will have its own credit score after you get it off the ground, something called a PayDex score. But when you first start out, you might not have a PayDex score. And what happens if you choose to rely on your personal credit, a practice many experts don't recommend? If that's the case, your personal credit score will play a large role.