Your credit score is your financial grade point average. And, just like a low GPA excludes you from Ivy League universities and prestigious jobs, a low credit score causes the doors of financial opportunity to slam closed in your face. If you have a bad credit score, there are many purchases you can’t make and opportunities you won’t qualify to enjoy.
Here are five specific ways a poor score can hurt you.
Land a Job
You might not expect your credit score to influence your job opportunities, but it actually can. According to a survey from the National Association of Professional Background Screeners, 16% of companies request permission to conduct credit or financial checks on job candidates.
You’re most likely to be evaluated by your credit report if you are applying for a position that involves money and security clearances, such as a bank manager or Chief Financial Officer. A low score caused by multiple late payments, excessive debt, collections, and bankruptcy filings may disqualify you from the job.
Rent an Apartment
You know you can’t qualify for a mortgage to buy a house with a low credit score, so you try to rent an apartment. Fair warning: you might be turned down there, too. Residential management companies require residents to have scores above a certain threshold in order to minimize their risks of non-payment and eviction. Unless you get lucky with an individual landlord who is willing to offer flexibility, you could be shut out from the renting process until your score increases.
Take Out a Loan
Banks are usually happy to lend money to borrowers and rake in their profits by charging high-interest rates. But even most flexible lenders won’t lend money to consumers when their credit scores sink too low.
Personal loans, mortgage loans, auto loans… they all become further out of reach when you have a bad credit score.
Why? Because lenders view you as a high-risk borrower. They don’t trust that you’ll make your repayments promptly (or at all), and they assume your loan will become a loss that ends up sent to collections. Even if you have every intention of paying your loan installments on time, your promises don’t count when pitted against your low credit score.
However, if you do want to try for a loan, OppLoans would be the place to start as they know your credit score might not be always a fair representation of your history. They can provide loans up to $4,000 even if you have bad credit and depending on your state and eligibility.
Start a Business
Starting a new business is hard enough under the best of circumstances. Launching a business with a bad score just adds a heavy anchor to the voyage. You’ll have a harder time obtaining vital business financing, net 30 terms, and other essential forms of support as you build your enterprise.
Read More: How to Start a Vending Machine Business
Buy a Car
Cars are everywhere but don’t underestimate how difficult it is to qualify to buy one. If you can’t pay for your car in cash – and who can, given that a new vehicle costs in the five figures – you need to apply for an auto loan. This involves a full credit check, income verification, and other factors.
A low credit score makes you more likely to be denied financing, even though the car acts as collateral for the loan. And if you’re lucky enough to find a lender who will approve you, expect painfully high-interest rates that send your monthly payments through the roof.
The Bottom Line
The bottom line? Improving your score should always be a top priority because, without that score, it’s nearly impossible to reach your financial goals.
Luckily, your credit score can always be improved with hard work and dedication.
You can keep an eye on your credit score with Credit Sesame, a free credit monitoring service that helps you improve and maintain your score.
Combo your efforts with Experian Boost™ too since the free service by one of the three major credit bureaus can instantly help improve your credit score. They do this by adding positive payment history from utility and telecom bills to your Experian credit file.