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How Your Credit Score Impacts Day-to-Day Life

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If you don’t plan on applying for a loan anytime soon, you may not check your credit score very often. The same applies if you aren’t making an effort to build your credit score. While both scenarios are perfectly understandable, your credit score impacts your life in ways that could shock you if you weren’t aware of them before. Learn just how large of an impact your credit score has and why it’s a good idea to make a constant effort to improve your credit score and health whenever and however you can.

Car Insurance

You can be a safe driver, own a car with plenty of safety features, and not drive your car very much. Still, you could find yourself with higher insurance rates than similar drivers in your area. Why? The reason could be that your insurance agent uses your current credit score to determine the overall price of your premiums. If you can manage to increase your credit rating from “Average” to “Good,” you could save about 20% on the cost of premiums. Do what you can to increase your credit score before it’s time to renew your insurance coverage. When your score increases, be sure to let your agent in on the good news to see what the two of you can do about lowering your premiums.

Rental Applications

Besides checking in with former landlords to see what kind of tenant you were, potential future landlords may take a peek at your credit score while conducting a background check. True, you may not have any arrests or tickets in your past, but your credit history could raise some red flags that make landlords think twice about taking you on as a tenant.

Why is this? If missed payments show up in your credit history, landlords and property managers often feel that could translate into missed rent payments. This makes perfect sense, as missed payments could be an indication that you haven’t been financially responsible in the past. Something else to think about with a low credit score when it comes to renting an apartment is that when landlords notice large debts on your credit report, they could get the impression that paying off those debts may get in the way of you paying rent on time. Your income can only stretch in so many different directions before you have to make sacrifices; one of those sacrifices could be your rent.

Utilities

Be sure to apply for a free credit score before signing up for such utilities as phone service, electricity, and water. Because you use utilities before paying for them, they’re essentially a short-term loan. That’s why utility companies often run credit checks before activating your services. While you won’t be denied services if you don’t have the best credit score or credit history, there’s a good chance you’ll be asked to hand over a hefty deposit before your services are turned on. This is a form of insurance for the utility company, in case you ever miss a payment in the future. That said, you could earn that deposit back once you establish a successful payment history and show you’re not the liability your credit score makes you out to be.

Job Prospects

Do you have aspirations to work in the financial sector or in a national security position? If so, you can count on employers running a credit check before deciding whether to hire you. What’s more, is times have changed so that no matter the industry you’re looking to work in, there’s a chance companies will consider your credit score before hiring you. If you take responsibility for the overall health of your credit, employers feel that’s a solid indication of whether you’ll take responsibility for your role in the company.

Additionally, poor finances and massive debt commonly bring stress, which can leave you feeling unfocused and unmotivated at work. That’s the type of employee no company wants. While you may have an abundance of experience and education, your credit score could keep you from moving forward in your career.

Romantic Relationships

It’s easier than ever for people to hop online and look into your background. Running background checks is especially common when it comes to romantic pursuits. If a person thinking of entering into a relationship with you discovers you have debts and bad credit, she or he may think twice about moving forward with you. Your financial health impacts your overall outlook on your life and your day-to-day mood, which impacts how you conduct yourself in a relationship. Also, if the prospect of marriage enters the picture, your romantic partner will marry your debt along with you.

You may not like how intertwined your credit score is with the rest of your life. Because there may not always be very much you can do about that fact, it’s best that you take steps to get (and keep) your credit house in order.

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