Bad Credit Scores Suck

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If you’ve ever found yourself up in the middle of the night, watching T.V. and trying to get back to sleep, you’ve probably seen lots of people on infomercials hocking “systems” or “programs” that will repair bad credit. While these charlatans are not to be trusted, the ubiquity of these ads might make you wonder: how much does your credit score matter?

The short answer is: a lot. Your credit score is one of the most important numbers attached to your name, for reasons that you may have never expected. This is why it’s understandable that people with bad credit are so desperate to improve it, with some even falling for the promises made by those of ill repute on late-night T.V.

Still not convinced your credit score matters? Take a look at the four things you might not be able to do if you have bad credit, discussed below:

Buy A House (Or Get Another Type Of Loan)

Lending standards have tightened substantially since the Great Recession, so if you’re looking to buy a house at today’s historically low interest rate, your credit score needs to be pristine.

But it’s not just home loans that depend on a good credit score, other types of loans are highly impacted by this seemingly insignificant number, too. For example, purchasing a car or getting a personal loan might be impossible if your credit score is really poor. Even if your score is decent, if you’re looking to get a loan soon, you’d do well to improve it as much as you can: lenders give the best interest rates to those with the best scores.

Rent An Apartment

Because your credit score represents your history with paying your bills on time, a measure of financial responsibility, many landlords are unwilling to rent apartments to those with poor credit scores. It’s standard these days for property owners to run a credit check on potential renters, so it’s unlikely you’ll be able to escape a bad score. If you find yourself in need of an apartment and have really bad credit, you’ll probably need a co-signer with a better credit score in order to snag your place.

Set Up Utilities

As with renting an apartment, utility companies use your credit score to determine how much of a financial risk they’re taking by allowing you to be their customer. After all, your cable company is essentially operating on good faith by providing you with service until you start paying your bills. This is why customers with poor credit scores are usually required to place a deposit with the utility company as a form of collateral, which sometimes amounts to several hundred dollars.

Get A Job

While this is increasingly controversial, some employers run credit checks on potential employees before offering them a job. Again, your credit score is a measure of your past behaviors with money, and some people generalize these behaviors to peoples’ overall character. You may or may not agree with this assessment, but unfortunately, it’s reality. If your credit score is really awful, a potential employer may not judge you to be trustworthy or responsible enough to work for him or her.

Hopefully, the information above has given you the motivation you need to improve your credit score if you need to or maintain your good score if you have one. After all, this number will follow you around forever – it’s important to keep it as high as you can!

About Lindsay Meredith

Lindsay is a high school teacher and personal finance blogger. She lives, works, and plays in the Washington, D.C. area.

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