Your credit score can significantly impact your financial life. It can determine the interest rates and terms you can get on loans and limit your access to said loans. For instance, it can affect your auto insurance rates, employment, utilities, and security clearances.
Not only is your credit score used to measure your risk when it comes to borrowing, but it is also perceived as a determinant for the overall risk involved regarding several other factors. People from all walks of life need a good credit score regardless of whether they are looking to acquire a credit card or whether they need access to essential services and opportunities. Besides limiting your access to loans, here’s how credit score affects other aspects of your life.
Auto insurance rates
This one is quite interesting as many people always thought auto insurance mediated risks based on your probability of crashing a vehicle. However, when it comes to owning a car, many other forms of risks are in play.
One of the said factors is whether you can finance insurance dues out-of-pocket. This means that if you have a low credit score, you might give the impression that you’ve had trouble making regular payments, which could be perceived as a lack of cash. Consequently, an insurance company might consider covering you as a significant risk and charge you a higher rate.
Employment
Sorry to burst your bubble if you thought a sterling resume, a recommendation letter from your previous employer, and referees are the only thing you need to qualify for that job. Nowadays, some employers also consider the credit score before hiring a prospective candidate.
You’re probably a learned fellow and might insist that you mustn’t include your credit score on your resume. That’s true. Similarly, you also reserve the right to disclose your credit score when your potential employer asks for it. But where does that leave you? Don’t be surprised when you miss your big break because you felt you couldn’t disclose your credit score in a job interview.
In today’s highly competitive job market, skills are incredibly valued. However, this global village has many people with similar qualifications aiming for the same job. As such, potential employers can afford the luxury to ask for your credit score to determine your responsibility when it comes to handling simple projects. And if you’ve not been diligent with your credit, they might find it hard to trust you with their projects.
Access to a utility account
It is common for your provider to request your credit score when creating a utility account. In this case, the firm wants to know if you can pay them frequently without extending you more time as it translates to money lost.
If your credit score ranges from fair to excellent (760-850), you can rest assured that you’ll have no issues setting up a utility account. However, if it is relatively low, the company might ask for some upfront payment or ask you to look for a co-signer. And how many people are willing to co-sign for your utilities anyway?
