Why is credit important in the economy?

Today's economy runs on credit. If you want to get a mortgage loan for a house or a student loan to pay for college, or if you just want to put your lunch on a credit card, a company is extending credit to you.

Your creditworthiness is defined by your three-digit credit score and is the key to your financial life. Good credit can be the make-or-break detail that determines whether you'll get a mortgage, car loan or a student loan. On the hand, bad credit will make it more difficult for you to get a credit card with a low interest rate and it will make it more expensive to borrow money for any purpose.

But even if you're not in the market for a loan, good credit can have a major impact.

Credit is the most important part of the economy ... Credit leads to an increase in spending, thus increasing income levels in the economy. This in turn makes higher GDP and thereby faster productivity growth.