What is the purpose of knowing your credit score?

Understanding your credit score is essential for assessing eligibility for loans and credit. Lenders use credit scores as a key factor in evaluating applicants for credit cards, mortgages, auto loans, and other forms of financing. A higher credit score generally indicates a borrower is less risky, making it more likely that they will be approved for loans and potentially at lower interest rates.

The other options focus on aspects that do not directly tie to the primary function of a credit score. While knowing your debt capacity can be informed by your credit score, it isn’t the main reason to know it. Similarly, identifying investment opportunities and allocating personal savings are more related to personal finance management than to the credit scoring system, which is specifically designed to evaluate creditworthiness. Thus, option B is the most accurate in capturing the primary purpose of a credit score.