Even if you have great credit, you may not give much thought to how your credit score impacts the rest of your life. Or, maybe you don’t care much for using credit cards and can manage your finances perfectly well on your own. Either way, it’s good to familiarize yourself with the many ways in which your credit score has a part to play in your everyday life, ways that may surprise you.
Where You Live
If you’re thinking of moving into a new rental space, take a look at your most current credit score before you start submitting applications. Landlords run background checks on prospective tenants, and they just may want to know what kind of credit score you have. Specifically, they want to determine if you have a history of late or missed payments. Their reasoning is that if you’ve missed bill payments in the past, there’s a chance you may miss rent payments in the future.
While a bad credit score won’t necessarily result in your application being immediately denied, you may have to put down a higher security deposit. That way, your landlord has a type of insurance plan in case you skip out on rent payments once you become a tenant.
Your Lending Terms
Rather than rent a home, maybe you want to buy one instead. If so, you can be sure that lenders will run a credit check. Of course, a low credit score is likely to see you hit with high interest rates on your loan. Like landlords, lenders want to head a potential disaster off at the pass, which can result in them making the most of their risky investment in you by charging you more in interest.
On the other hand, maybe you don’t need to learn how to improve your credit score because you don’t even have a credit history. Surely this won’t look bad on your mortgage application, right? In actuality, lenders don’t really know what to make of this. You could be good with money, or you could be irresponsible with it; lenders have no way to tell either way. What that all boils down to is that even those with no credit history are likely to get interest rates on the higher side.
Even cellphone providers run credit checks before allowing you to open an account with them. If you have a low credit score, you may be asked to drop a deposit before your service is up and running. Much like landlords, cellphone service providers want to hedge their bets in regards to those with not-so-great credit. No matter what kind of score you have, do some digging into whether the cell phone service provider will run a credit check before offering you service. A hard credit inquiry will impact your score, no matter how high or low it is.
Where You Work
You work so you can pay your bills on time, which helps your credit score. So, in a way, you rely on your employer to help you boost your credit score. But just like it’s hard to get a job that requires experience when you don’t have any experience, it can be hard to find a good job when you don’t have good credit…because you don’t have a good job.
Before employers make you a job offer, they may look at your credit score while conducting a background check. If you can’t be trusted with money, employers may feel you can’t be trusted to handle their business, especially if that business is in the financial sector. If you’re having a hard time getting callbacks for jobs, it could be your credit score that’s holding you back, not anything on your resume.
Your Romantic Relationships
With more and more millennials being saddled with student loan debt, a person’s credit score could impact her or his love life. Specifically, a person is likely to want to know just as much about a potential mate’s credit background as her or his dating background. The reasoning is that if a relationship develops and deepens, the couple’s finances are sure to become intertwined. Nothing can sour a relationship faster than financial hurdles. Also, a person with a great credit score and healthy financial habits may not want to share bank accounts with someone who’s horrible with money.
Credit Card Rewards
If you do a lot of traveling, you may love credit cards that give you free miles. And who doesn’t love using a credit card that offers cashback? When used responsibly, such as paying your bill off before receiving your monthly statement, credit card rewards can almost act as free cash. That said, such rewards are usually only offered to those with a great credit score. Without such a score, your credit card will likely be one that doesn’t come with great perks.
As you can see, it’s worth the effort to do what you can to always work on improving your credit score. You never know how your efforts can improve your day-to-day life.