When it comes to your purchasing power and your ability to find employment or a place to live, three simple digits can make a huge impact – your credit score. This score is the numeric representation of your financial health, and it can make a significant dent in your lifestyle if that score is low. Credit scores generally range from 300 to 850, and anything lower than 600 is considered unstable credit, and can affect your ability to obtain a credit card, rent a home or apartment, or take out a loan. They can also affect the interest rate on any loan or credit card you obtain. Your credit score is calculated using your credit history, so missed or late payments, or a lack of credit usage altogether, can make an impact.
Here are a few ways your credit score can affect your everyday life:
- Leasing an apartment or house. When you’re a renter who’s searching for a place to live, you’ll find that many leasing agents require a certain credit score for an application to be approved. If your score is low, you might not get the kind of dwelling you desire – nicer, more upscale apartments and condos generally require a higher credit score due to the cost of rent and utilities. When you submit a rental application, landlords review your credit history to see if you have a history of missed utility payments or even outright not paying rent.
- The cost of your insurance premium. If you watch television, you know there are a lot of insurance providers out there, so you want to shop around before making a commitment; you might find yourself saving hundreds of dollars every year by doing your research. However, when insurance providers calculate the cost of your annual premium, they also review your financial history and responsibility.
- Finding a good job. If you’re in the middle of a job search, it’s a good idea to check your credit score, as it’s not uncommon for an employer to research your credit history after you’ve submitted your resume and taken part in an interview. This is generally part of a comprehensive background check most employers do when looking for the right person for the job. In a competitive field, a lower credit score can make or break your hireability.