What does a higher credit score generally indicate about an individual?

A higher credit score typically indicates that an individual is viewed as a lower risk to lenders. This score reflects the individual's creditworthiness based on their credit history and financial behavior, such as timely payments on debts, manageable levels of outstanding debt, and a positive credit utilization ratio. Because of this perceived lower risk, lenders are more inclined to offer loans and credit at lower interest rates. This benefit arises from the expectation that an individual with a higher credit score is more likely to repay borrowed funds responsibly and in a timely manner.

In contrast, a higher risk of default would correlate with a lower credit score, while low income and a high debt-to-income ratio would also likely contribute to a lower score. Thus, an individual with a higher credit score is seen as financially stable, making it easier for them to secure favorable credit terms.