Your Credit Score Will Follow You Through Life
The one mistake consumers should never make is to underestimate the impact your credit score will have on your financial life.
Anytime you want to borrow money, the person on the other side is going to look at your credit score first to see if there is a good chance they will get their money back.
If you think a low credit score won’t be a problem for you, the following four examples may change your mind.
To anyone who doesn’t know you, a low score says “This person can’t be trusted with other people’s money”.
The lack of trust means you will have to pay more in interest for every dollar you borrow.
Higher interest costs leave less money to spend on the important things in life such as medical care and food, let alone entertainment and gadgets.
2. Trouble Getting a Loan
You could have trouble being approved for a loan when you really need it.
No car loan could make the difference between keeping a job or having to file for unemployment benefits.
You could be forced to take out a dangerous payday loan at 300% annual interest because no regular bank would lend to you.
3. You Could See a Worse Offer Than Someone Else
Cookies on the internet allow advertisers to display advertisements for loans with worse terms and credit cards with fewer rewards than you would see otherwise.
This makes it harder to find the best loan product for your personal situation and you could end up taking out a more expensive loan than you actually qualify for.
4. It Could Keep you from Getting a Job
According to the Society for Human Resources, up to half of human resources departments in America said they check credit reports before making a hiring decision!
Your low score could prevent you from getting the job you need to pay off your credit card debt and improve your score.
This is one of the strongest examples of how a low credit score can lead to a financial death spiral that often ends with a bankruptcy filing, forcing the consumer to start building a credit score back up from 0.
The first step in building a solid financial future for yourself starts and ends with your credit score.
Your credit score determines the interest you pay and can open doors to better-paying jobs and other opportunities to grow your money that are closed to people with poor credit scores.
Making the decision today to pay down any credit card debt will set you on a path to financial freedom and will have a positive financial snowball effect throughout the rest of your life.
Don’t underestimate the power of a credit score.
The opinions provided in this article are those of the author and do not constitute investment advice. Readers should assume that the author and/or employees of Grizzle hold positions in the company or companies mentioned in the article. For more information, please see our Content Disclaimer.