Okay, you probably get the idea that your credit score is important. But your credit score is only important because of something called "risk-based" financing.

Risk-based financing determines what interest rate you will pay, based on your credit score.

"Risk-based" financing says you pay higher rates if your risk of not doing what you say is higher.

And that risk is measured by your credit score.

So, is there anything wrong with "risk-based" financing?

If risk-based financing is done ethically, it can help some people.

Here's what we mean by "ethical:" The interest rate is determined by the risk.

For instance:

• Your risk level says you should pay 10% interest.
• The lender charges you 10% interest, no more.