If you’re indifferent about your credit because you have no interest in using it, you may be unaware of just how many things depend on having a decent score. Some of the following are just some examples of what is affected by your credit:
Loans and credit cards
This may seem like an obvious one, but it’s worth noting that approval for credit cards and loans relies heavily on decent credit. You may not have any desire to open up a credit card, but it’s important to think long-term. In the near future, you might want to purchase a home or car, and need to finance the purchase. Good credit is imperative in order to receive a car loan or mortgage. Or maybe you won’t have to finance a large purchase, but you eventually change your mind about credit cards—after all, they can offer a lot of advantages—but have difficulties qualifying for one. Although getting approved for credit is certainly possible with a poor credit score, it’s unlikely that you’ll receive the low advertised rates, and will likely have a much higher APR.
You may already know that getting approved for a mortgage can be difficult to impossible with poor credit, but did you know it can greatly affect your chances at getting approved for rental housing as well? If you have bad credit, you might need a cosigner in order to lease your next apartment, or you may be required to pay a much higher security deposit. If there is a high demand for rentals in the area you’re looking to live in, landlords can be especially picky during the screening process, and not even offer these options to applicants with bad credit.
Monthly utilities and cell phone contracts
Opening up utility accounts in your name can be difficult if you have poor credit. If you live alone, your only option might be to make a large deposit, and one that you might not see for a long time or until you move and close out your account. The same can also apply for cell phone services; getting approved for a contract can be difficult if your credit is bad, and you might need to opt for a prepaid cell phone.
Many employers will run full background checks on job candidates before officially offering them a position, and these background checks often include credit reports. And if you don’t think that your bad credit won’t stand in your way of landing that dream job, think again: according to the Society of Human Resource Management, approximately 47 percent of hiring managers will take credit into consideration when making their final decision.
These days, having a good credit score is imperative; there is so much that relies on that three-digit number. If you’re deep in debt, try to put a plan into action that can realistically allow you to make bigger payments towards your high-interest loans and credit cards so that you can pay off your debt quicker. If you’re already in a lot of debt and your credit cards are almost maxed out, you’ll also want to avoid making any additional charges until you’re close to paying them off. Otherwise, if you’re just making minimum payments every month and charging more, you can get stuck in an endless cycle and it’ll be that much harder to get out of debt and improve your credit.
Nothing above is meant to provide financial, tax, or legal advice. You should meet with appropriate professionals for such services.