When I turned eighteen and signed up for a credit card just because they were giving away a free shirt to the college I had just start attending that fall, I had no idea what a whirlwind of careless spending what was ahead, let alone knowing what a credit score was at the time (boy, was that company smart for soliciting ignorant beginning college students). What I didn’t realize at the time was my current actions would affect my financial life for years to come. Credit score is everything when you finally become an adult and get a car, a house, and even insurance. In order to get the most favorable rates on the market you need the highest credit score, or every percent of APR that you pay on top of just for having less than perfect credit could cost you thousands. While credit affects some of the most important aspects in your adult financial life, there are also some that you may not even realize, which is even more reason to get your score to the peak of what it should be, upwards of 800. With the ease of seeing your score these days, now even being included in your monthly credit card statement, you should be able to see the rise (and fall) of your score each month, all the more motivation to improve as time goes on to avoid wasting money on interest that you wouldn’t be paying had you a great credit score.
Rent Approval in Jeopardy
For those that homeownership is not for them and choose to rent, when you fill out your rental application to your (hopeful) potential future landlord, you can be sure that your credit will be checked to see if you are in line for a perfect upcoming payment history. If your credit is on the verge of scary, you may want to room with a co-signer, but also keep in mind that they are taking on the risk for you as well if you do not come up with your share of the monthly rent.
Employers Can Even Take a Look
Going on an interview is rough enough, putting on a suit so you can sit in front of complete strangers trying to convince them why you would be a good candidate for their company. Throw checking credit into the mix and they can now figure out to see if you are the complete package or not. If you come up with having previous personal finance wrongdoing in the past it could come back to haunt you in not getting the dream position you wanted. That might be pretty embarrassing if you are told the interview went good but they can’t hire you because of your financial background.
Could Miss Out on an Installment Plan on a New iPhone
The days of signing a contract and getting a free phone are long gone, and now you pay a monthly cell phone data and minutes fee (and which most minutes and texting are unlimited), but the phone comes something new that we are not used to. Cell phone companies are now requiring you to pay for the entire retail price of the phone (which can be $700) and they will divide the payments across 30 or so months. The problem is, if you have bad credit, they may not trust you enough with the phone equipment that they will require you to pay the entire amount up front, or at least a large deposit. With the phone plan, itself it is less risky on their end and they can just shut off the line.
Pay Premium Car Insurance Rates
Well they seem to check credit on everything else, so why not car insurance at this point. They already check for the lease/loan itself, now insurance is another check and all the more reason to make sure you strive for the best credit score you can.
Lose Out on Rewards Dollars
A major part where credit score comes into play is getting approved for the great credit cards that are out there, most importantly those with rewards points. They can come in the form of a cashback check once a year, points that you can redeem into gift cards, or the one you have heard about for years, airline miles. The thing that makes it great about these cards is that it is free money just by making the normal purchases you would be making anyways (provided you are not going above and beyond).