Hello! Today, I've partnered with Lexington Law to help answer the question “What does your credit score impact?”
If someone tells you to ignore your credit score, then they may be crazy.
Sure, for some people, ignoring their credit score may be all fine and dandy.
However, for the average person, you can improve your credit score quite easily and actually use your credit score to your advantage.
In order to take increasing your credit score more easily, you may want to learn about what your credit score impacts, so that you can get that motivation you may be seeking.
This is important because so many people think that their credit score only impacts them getting a loan. This is not true at all!
Let me repeat – THIS IS NOT TRUE!
Your credit score can impact so many other areas of your life, which may have absolutely nothing to do with a loan.
Does my credit score impact buying a home?
This is a big reason why improving your credit score is so important.
Whether or not you are getting a home loan, your credit score may impact you. Your credit score may impact you in areas when buying a home such as:
- Your credit score can impact whether or not you are approved for a home loan.
- Your credit score can impact how large of a home loan you are given.
- Your credit score can impact the size of the down payment you are required to put down.
- Your credit score can impact your interest rate.
- Your credit score can impact your home insurance rate. Yes, you may actually pay more in home insurance if you have a low credit score. This is because insurance companies tend to look at credit scores to determine how risky you'll be to insure!
Read more at How Your Credit Score Impacts Your Home Buying Process.
What other areas does a credit score impact?
Your credit score can impact other areas of your life as well.
There are many instances in which your credit score and/or credit report may be looked at. It is important to work on improving your credit score, because you never know when you may need it.
Also, it's something you can personally control, so why not work on increasing your credit score?
Here are other areas your credit score may impact:
When applying to rent a home – If you have decided you don’t want to own a home, do not think you have escaped having your credit history checked. Your landlord will most likely check your credit history and this will be a part of your rental application. They will want to know if you pay your bills on time or if you have ever skipped one completely. This will say a lot about you as a renter, whether you want to believe it or not. If your credit history is not up to their standards, you may be denied the rental altogether, you may be asked to pay multiple months at once, you may be asked to pay a HUGE deposit, or you may be asked to find a co-signer just in case you fail to pay your monthly rent payment. And, yes, this is important because rentals are becoming more and more difficult to find, so someone with a good credit score may win a rental over you if your credit score isn't up to par.
When applying for a job – This may be shocking to hear, but there are some employers who will check your credit report with your permission, and this will help to determine if you will get the job or not. Industries that often check your credit report include those dealing with financial services, chemical, and defense. I once read a statistic that around 30% of companies will check a potential new hire's credit report before making a hiring decision.
When applying for a loan (home, car, medical, etc.) – If you apply for a loan, your credit score and credit history will definitely be checked. Before you are approved for a loan of any sort, the lending institution is going to thoroughly check your financial history so they don’t end up losing money on your loan.
When determining what interest rate you'll receive – A good credit score can mean you qualify for a good interest rate, and a bad credit score may mean that you get a very high rate. I have seen a 24% interest rate for a car loan for someone before! A higher interest rate can mean paying thousands of dollars extra, so it is always best to work on improving your credit score. Some people like to use loans to their advantage, such as taking advantage of a 0% financing offer. Usually, these are only open to those with excellent credit scores.
When trying to get a new credit card – If you don’t care about credit, then you probably will not care about this one. However, if you want a credit card, especially one with a good rewards system in place, then you will want to work on improving your credit score. The good reward credit card offers are usually only available to those with good or excellent credit scores.
If you're looking for professional credit repair services, then I recommend looking into Lexington Law.
Lexington Law has been around for several years and has helped many, many people increase their credit score. They can help you remove items from your credit report such as items in collections, late payments, judgments, bankruptcies, foreclosures, and more, which can help you to increase your credit score.
You may be wondering how Lexington Law can legally repair your credit. I found this on their website – How can bad credit be legally repaired?
“The most popular method for restoring bad credit is the credit bureau dispute. Because of the Fair Credit Reporting Act, you have the right to dispute and delete any items on your credit report that you feel are inaccurate, untimely, misleading, biased, incomplete or unverified.”
Lexington Law helps consumers use their legal rights to fair credit reporting, which helps them to improve their credit score.
This can then allow your credit score to have a more positive impact on your life!
What has your credit score impacted in your life?
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