3 Ways Your Credit Score Impacts Your Life

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This is a guest post from Zach of moneyedup.com

During tough economic times, some people find themselves in a situation where their credit can be adversely affected based on difficult financial decisions. It may be a decision to delay payment on a credit card, or fall behind on a mortgage payment, or allow a doctor bill to go into collections. While it may be unavoidable, it is important to maintain a long view of your credit standing, because a low credit score can impact much more than your ability to obtain credit. In the long run that could be the least of your worries. There are three ways your credit score impacts your life: Borrowing costs, employment, and insurance.

Higher Borrowing Costs

Most people are aware that, if they fall within a lower credit score range, they are going to have more difficulty obtaining credit on favorable terms on long term loans. The greater concern should be for the cost of your existing credit. If you existing credit cards, or variable line of credit, you could find your rates increasing once your creditors see that their risk has increased. If you are a renter, you may find yourself unable to obtain a new lease if you need to move. Private landlords may be willing to lease you their property, but only if you pay them six month’s rent in advance. And, they are likely to charge you a higher amount of rent.


According to recent data, nearly 60% of employers conduct a credit check on prospective employees prior to hiring them. Although most employers will deny that your credit history will influence their hiring decision (they use credit reports to verify Social Security and past employment information), many would be reluctant to hire a person they view as irresponsible. Retailers or any employer involved in finance aren’t likely to hire someone who, in their view, may make some bad decisions due to their being in a distressed financial situation.


Insurance companies rely upon studies that show people with lower credit scores also present a greater risk of claims. As part of their annual or semi-annual check on your driving record, they may also review your credit report. A negative change in your credit score could result in a higher premium payment.

Sometimes bad things happen that can lead to a drop in your credit score and, for many people its only temporary. Watching your credit score will also help you with protecting your identity. But, with so much at stake – higher borrowing costs, higher insurance costs, and limited employment options – every effort should be made to start rebuilding your score. Looking for credit card debt relief? Read more on at moneyedup dot com.

References: BestCredit: How to Win the Credit Game, 2nd Edition by Dana A. Neal

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