We are a credit based society. If you want to buy a house and are not paying (gulp) in cash, you need credit. Same goes for a car. And if you are applying for a credit card, you need credit! Anytime you are applying for credit or asking for a loan, before you are granted the money to accomplish your dreams (or just put a roof over your head and wheels beneath your feet), the lender will look at how creditable you are and that means how creditable is your credit report.
A credit report is, essentially, your credit history (when you took out loans, and when and if you paid them back) and how much you owe each month as well as how much credit you may access. A lender is going to look at your credit report to see if he will likely get his money back or if you are risky business. Depending on how good your financial outlook is, your credit report can effect whether or not you get the loan, and at what interest rate. And the higher the credit risk, the higher the interest rate. Although the report does not tell the lender that you are a good or bad credit risk, it does give him the facts he feels he needs to make that decision.