October 3, 2023

Although you probably know that your credit scores are important, you may not be aware that your scores can affect your everyday life. A credit score can act as your fingerprint, and some organizations consider how you deal with your finances as a reflection of who you are as a person. A poor credit score could lead to greater consequences than not having the ability to get a loan or credit card.

Credit Scores Save or Cost You Money

If you plan on buying a home now or in the future, you need a good credit score. Although some lenders will qualify you if your score is low, you will pay a much higher interest rate. Mortgage companies and lenders use credit scores to determine your willingness and ability to pay your debt on time.

If you have a low score or no score at all, lenders will look at you as a high-risk borrower, and you will pay more in interest and fees. Over the life of the mortgage, it could cost you tens of thousands of dollars that you could have saved if you had a good credit score.

Credit Scores Influence Careers

Unfortunately, many companies use your credit score during the hiring process to gauge your overall character. If you have a poor score, a company may see that as a lack of discipline, especially with something as important as your finances.

If you want a career in fields that require you to work with other people’s money or a job that requires plenty of responsibility, your credit score can affect whether or not you get hired. Although it may not be fair to use your credit score to determine whether a company should hire you, the fact is many companies are using credit scores.

Credit Scores and Where You Live

Property management companies and landlords today conduct credit checks before they decide to rent to prospective tenants. If you want to rent and your score is low, you will either pay more in rent or get outright denied. Landlords need to know if you can make your monthly rent payments on time, and many of them use your credit report and score to determine if you can meet your obligation.

The bottom line is credit scores have a dramatic impact on your everyday life. Aside from some of the more common ways listed above, a poor credit score can affect your ability to refinance high-interest student loans, pay down credit card debt, and it can even affect your love life. In today’s economy, a potential suitor might think twice about making a commitment to you if they believe you cannot control your finances.