You are probably aware that the tricky little number called a credit score affects you throughout life. There are the obvious impacts, including getting approved for a home or car loan. You may know about the increased fees and interest rates that come with a lower credit score. However, there are some negative outcomes that you might not necessarily expect.
1. Job Opportunities
Did you know that potential employers can check your credit history? While they can’t check your exact credit score, companies evaluating you as a possible hire can see details. Most states allow them to see credit reports, making them privy to the number of open lines of credit, unpaid balances, outstanding loans, missed payments, and more. Keep in mind that to do this, they need your signed permission. This is just one of the many reasons why you should read the fine print in a job application or contract thoroughly before signing.
Security clearances are also mandatory for certain jobs, such as those within the government. If you have a low credit score, this may impact your ability to pass. Career options are already slim for most, so don’t let a number that you can control do the talking during your job search.
2. Credit Card Rewards
Credit cards are usually touted as a great way to build up your credit score. However, they can be a slippery slope. Aside from the obvious pitfalls of credit cards, like high-interest rates and racking up debt, there is another caveat. Credit card reward programs are incentives to use the card and make money back. You can also market the company’s credit card in front of your audience(the prospective clients) and earn commission through credit card affiliates. Do you have a lower-than-average credit score? Well, this may affect how much you are rewarded. Credit card companies take this into consideration and won’t offer you the same perks advertised.
3. Signing Up for Utilities
Utility bills, such as for electricity and internet service, are already a source of woe for many. When moving into a new residence, signing up for utility services is on your long, frazzled to-do list. What you may not account for is the effect that your credit score may have on this process. Utility companies sometimes ask for a deposit before allowing you to sign up for their service. This is usually due to a low credit score or bills in collections.
4. Cell Phone Contracts
Similarly, mobile providers want to know that you can pay your phone bills on time. In the age of social media and constant connectedness, it would be a hassle to have to hunt around for any service that will take you. A low credit score can impact your ability to get a cell phone contract with a leading provider.
5. Personal Relationships
Branching away from the tangible effects, bad credit can also put a strain on any interpersonal relationships. While it’s a common misconception that getting married magically affects the credit scores of each spouse, it can affect you down the road. If you want to apply for a joint back account or cosign for a home loan, your credit score can impact these big life decisions. Your activity on a joint bank account will also impact both credit scores.
Financial stressors can negatively impact a relationship before marriage, as well. This isn’t to say that positive communication skills can’t counteract a bad credit score. However, money is consistently among the top 5 things couples fight about.
6. Mental Health
If your interpersonal relationships are struggling, you will face mental turmoil. Even apart from relationships with others, your negative financial situation can take a toll on your mental health. While people with pristine credit obviously also suffer with anxiety and depression, financial strain can be one of the triggers for you, personally.
While having a good credit score won’t take away all the pain in your life, it can certainly lessen your stress surrounding finances. The unexpected ways that bad credit can impact your life shouldn’t be barriers for your success. Working on your credit score now can positively affect your life in ways you weren’t aware of before.