A credit score can prove to be the ultimate source of peace or become the worst nightmare for you. People might have heard about the good and bad impacts that a credit score can have on their lives, but the question is: have you ever realized its importance? Probably not. Your credit history, surprisingly, affects some major and most critical areas of life, such as determining whether you will be making retirement savings or not. And If it is not maintained at a healthy level, consequences can be dire.
At a Glance:
A credit score is a general and direct indication of your buying power. In other words, a good credit score helps you in enhancing your buying power by making you appear financially sound in the view of creditors and banks. This is a multi-factorial element which ultimately effects your lifestyle as your quality of life hugely depends upon how easily you can afford the necessities of life.
Here is a little description of which areas of your life are most commonly affected by credit score and to how much extent.
A lot of insurance companies have adopted using credit scores to evaluate the financial background of their clients, while some still do not use this process. The main point is, creditworthiness matters! If you have a strong financial background with a good credit score, no doubt, not only the policies will be in your favor but also coverage will have a lot of other benefits and facilities. On the other hand, with a bad credit score, it will be difficult for you to get insurance.
Believe it or not, your chances of getting hired by a company also depend on your credit score. Almost all the employers use your credit history in order to better understand your financial condition. Our chances of landing your dream job increase manifold if you have a good credit score. Similarly, a great credit score can also help you in starting your own small business. So, to avail better employment opportunities with all your desired facilities, you need to have a good credit score maintained at a safe level.
Owning a house:
To buy your own house in the present age, as we all know, is a difficult task to perform. Because of the tumultuous world of real estate, it is hard enough to gain an element of surety that your desired things will be granted to you. But what makes it even harder? Bad credit history. To think of buying a house with poor creditworthiness is mere imagination but if you do possess good credit score it will be a lot easier for you.
Utility Services and Bills:
Utility service providers also use your credit history. Like your Television, Mobile phone and Internet subscriptions are affected by your credit score. If you have a poor credit score your subscription might not be approved or even if it does get validated, you must pay a huge amount of money as a security deposit to the company. While with good credit, you can easily subscribe to their services at lower rates with no deposit at all.
Banks and other private lenders utilize your credit history to estimate the risk you impose on them. If the risk is low, means you possess a good credit history, your loan will be approved on a priority basis. But unfortunately, if you have a bad credit score your application will get denied in the first place.
Credit Score and Lifestyle:
Other than these factors, credit score also affects your retirement plans, credit decisions, debt management, mortgage and interest rates, and complimentary discount packages and offers form the credit card companies. In order to live a stress-free life with the quality of lifestyle being maintained at the same level, it is advised to regularly check your credit score and try to elevate it as much as possible.