Credit scores were invented as a means of helping financial institutions trust people they were making loans to. An individual with a high credit score is more likely to pay back a loan than someone with a low score.
Credit scores are managed by third-party organizations, called credit bureaus. Scores go up and down based on a large number of variables, including payment history, amounts owed, types of credit used, length of credit history, etc.
Credit scores matter if you want to get a loan to buy a house, buy a car, start a business, etc. And so it’s important to actively manage your score and do everything in your power to keep it high. For more information, read this article.