The Impact Your Credit Score Has on Your Life

“There is no need to worry about my credit score since I intend to live a debt-free life” is a statement that most people tell themselves when the matter of credit is raised. You may not notice that your credit score is used by more than just the lenders – other companies and institutions use it to determine your viability for services. Here are some of the top ways in which your credit score can impact your life and cause you to benefit from or miss out on deals and opportunities.

Renting Property

Have you been eyeing a particular rental apartment in a secure and lovely neighborhood? Well, before you get the keys to your new rental home, you may need to have a good credit score. Today, landlords review their potential tenants’ credit ratings among other things before determining their suitability for renting the houses. Since a rental contract requires you to pay a certain amount of money every month, the landlord needs assurance that you have the potential to pay. Now, a low credit score reflects poorly on your ability to honor financial obligations, and this can cause you to miss out on your dream house. On the other hand, a good credit score opens opportunities for you to live in any apartments and neighborhoods that you can afford.

Insurance

Whether it is homeowners, car, health, or life insurance, everyone will find themselves approaching an insurance company at some point. If you own a vehicle in the United States, most of the states require you to carry liability coverage as the minimum insurance. Insurance companies will always look into your credit score when determining your monthly premiums.

Individuals with a low credit score always miss out on low-interest rates. The insurer will charge you higher premiums to avoid incurring losses if you make claims. However, if your score is high, you get to enjoy lower premiums and choose the insurer of your choice as you don’t have to shop around for the cheapest ones.

Mortgage Interest Rates

Most of the individuals who intend to buy a house know how difficult it is to get one without financing. Unless you have been saving for years on end, you have to take a mortgage for you to become a homeowner. A mortgage is a loan that is paid over an extended period, usually up to a decade or more. Financiers assess one’s credit rating and ability to make monthly payments before approving a mortgage application. With a bad credit score, most of the creditors can turn down your offer. However, if you get a financier, they will charge a high-interest rate as a low credit score is a sign that you may not be able to pay for the house.

Access to Credit Cards

Credit cards have made life easy for everyone today. You can make both small and large purchases even when you don’t have cash provided you pay the monies on time. Individuals with proper credit have access to credit cards that also offer reward points, cash-back offers, and other lucrative benefits. They change the way you make purchases and even come in handy during an emergency. However, once your credit score starts deteriorating, the limit on your credit card begins to decrease. A poor rating will eventually hinder you from using credit cards and send you back to paying with cash.

Employment opportunities

Have you been thinking about changing jobs? If so, you should know that your credit score is a significant factor in determining your candidacy for that new post you want. Employers are looking to work with employees with a good credit score as this shows that they are responsible, accountable, and trustworthy. Also, a good credit score means that an employee is less likely to embezzle funds or steal. It also reduces liability for negligent hiring for employers. For this reason, your credit score could mean you will remain stuck in the job you don’t like or get your dream one.

What can you do about credit?

If you have a low credit score, there is no need to panic yet. A few measures can be taken to improve the rating and enjoy the benefits of an excellent rating. First, pay any outstanding loans that you have, including car tickets, and your name in the clear. After that, you can borrow small amounts and pay on time to build your rating. Pay your bills on time and avoid taking on multiple credit cards that you may be unable to pay.

Follow Us

Leave a Reply

Your email address will not be published. Required fields are marked *