Many people know that their credit scores have an effect on their lives, but they don’t realize the actual ramifications of that score. Your credit score invades every single portion of your life, and it can hold you back or push you forward in a lot of ways. If you don’t have a good credit score, you might be wondering what, exactly, that is going to affect. The truth is that a bad credit score can affect all sorts of things in your life. Here are just the top three ways a poor score can affect you.
First, a bad credit score can obviously affect your chances of getting credit. This is what it’s primarily used for. Your score helps potential lenders assess how responsible you are with money and how much extra debt you can afford to take on. If you already have a lot of debt or a history of failing to make payments on time, you are much less likely to get a mortgage, car loan, or credit card than if you had a good score.
Not only can a bad score keep you from getting the loan you need, though, but it can also keep you from getting good rates on a loan you do receive. It may not seem like much, but a difference of even one or two percent can make a big difference on your payments and overall interest payments over the life of your loan.
Second, a bad credit score can actually keep you from getting a job. That’s right. Many people are totally unaware of this fact. Basically, when you are applying for a job, your potential employer will assess your character in every way possible. Many will pull your credit score, which is a measure of overall responsibility and lifestyle. If your score is terrible, you may get turned down for a job that you are otherwise qualified for!
Third, a bad credit score can keep you from getting things like a cell phone contract or a rental home. These things, too, rely on your credit score as a measure of your responsibility. If you’re notorious for missing or making late payments, you’ll be less likely to get a contract with landlords and other companies.
As you can see, having a poor credit score can really leave you with some poor life options. This is why it’s vital to take every possible step you can to repair your credit score.