Credit scores for a long while went ignored by many. Individuals would blindly open credit accounts and default on payments with little to no knowledge on how it was hurting their score. Many people were also hesitant to check their scores with the fear of adding an inquiry to their report, thus lowering their score.
Through the implementation of services like Credit Karma and MyFico, everyday consumers have the freedom to stay updated on their credit score and history. Even with these services available, people still have yet to grasp how their credit score impacts them. Here are three ways your credit score affects your life.
Determines if Loans Get Approved
Your credit score is a reflection of your credit history. If you have multiple sources of credit and a history of timely payments, you are more likely to get approved for a loan. Contrastly, if you have multiple credit accounts with a history of late or missed payments, you are deemed untrustworthy and almost guaranteed denial.
It is also important to note that a limited credit history or no credit history is not necessarily a good thing. Creditors and lending institutions need to have something to reference to attest to your reliability. By only having a single credit account or no credit whatsoever, lenders cannot accurately assess your dependability and may deny your loan application.
Limits or Expands Finance Options
Just as much as a high credit score can grant you low interest rates and cash-back rewards, a low credit score can inhibit you from using credit altogether. Credit card companies can decrease your limit or even deny your application for a credit card if your credit report is riddled with late payments and defaulted accounts.
With a positive credit report, lenders are willing to give you access to more funds and exclusive offers limited to trustworthy customers. Being able to utilize credit can also improve your credit score as you have the opportunity to continue making regular on-time payments.
Increases the Price of Bills
Banks are not the only entities that pay close attention to your credit score. Companies that you purchase goods from or whose services you use have a keen interest in your credit history. Cellphone providers, insurers, and utility companies want to know how trustworthy you are with money. Those who worry about your ability to make on-time payments will likely charge extra fees or increase your interest rate.
Is your low credit score a result of a creditor lawsuit for a defaulted account? Heather Benveniste with Benveniste Law Offices can serve as your legal representation and make you aware of credit card debt settlement options. Heather has seven years of experience working as a debt collection attorney where she gained insight on how creditors operate. She now uses that knowledge to represent the afflicted debtors of Illinois. Contact us today for a free case evaluation. You pay nothing until we win your case.