Your credit score follows you throughout your life. That means if you have a low credit score, your life can be negatively impacted in many ways. You could be denied access to credit cards, auto loans, rental applications, and cell phone plans. And most likely, for those financial products you are approved for, you’ll probably pay higher interest rates.
Bottom line, there are many ways a low credit score can stop you from getting what you need in life. The top 3 ways your low credit score can negatively affect you include:
Credit Cards – If you have a low credit score, then your application for a credit card could be denied. That means if you need to buy something, you’ll probably have to pay with cash. And if you are approved for a credit card, you’ll probably pay a higher interest rate.
Home Mortgage – Home ownership, it’s what most of us dream of and work to achieve. But if your credit score is low, you may not get approved for a home mortgage, which means you can’t afford your dream home. And like credit cards, if you’re approved for a home mortgage while having a low credit score, you’re not going to get the best deal…meaning, you’ll be paying a higher interest rate.
Utilities – Electric, phone, cable…many of us believe that the way it works is that you sign up, receive a bill for the utilities you use each month, and pay your bill. However, if you have a low credit score, utility companies see you as high risk – or, in other words, you won’t pay your bill. That means you may have to pay a security deposit to receive service in your name.
Check out this great infographic by CreditSavvy.com that shows Jake’s credit journey:
What can you do to build your credit score, so that you can be approved for the best deals and get what you need in life? Start by paying all your bills, including rent, on time. And don’t forget, services like RentReporters can report your on time rent payments to TransUnion to build or boost your credit score.