Why is My Credit Score so Important?

By: Craig Thornburrow

There are many consumers that do not realize how far reaching their credit score is and what it actually affects. There are so many areas that are now affected by your credit score that having poor credit can really hurt you. It no longer just affects how many credit cards you can qualify for but it can actually affect your ability to make a living, your car insurance rates, and whether or not you can even insure your home.

Throughout our daily lives are credit worthiness effects almost every aspect and when you are considered a high risk candidate it can have devastating effects that you never even considered. That is because almost everything you do now a days has someone running your credit report. Once they do run the report you will reap either the benefits or negatives from your report. Here are a few example of what you can expect.

Utility Deposits

One great example of this is when you need to turn on utilities for a home or apartment that you are moving into. If you have a high credit score you will either not be required to give any deposit or you may be asked to give just a nominal fee. However if your score comes back low the company will now look at you as a high risk to default on the bill and often times require up to three months of service paid for up front or a very high deposit.

Employment Opportunities

If you are applying for a job many employers will now run a credit report on any perspective employee. The basis for this is they feel that if you are not responsible enough to fulfill your obligations then you are probably going to be the type of employee that is either difficult to work with or ends up calling in sick constantly and not taking your job as serious as they would like you to. When your score comes back low they will inform you that you do not meet their criteria for employment with their company.

Car and Homeowner' Insurance

Anytime an insurance company thinks that you are a high risk client you can bet that you are going to pay considerably more for your policy. This is especially true for car insurance. These insurance companies are going to protect themselves from clients that are going to default on the insurance premiums. They do this by either requiring a very large down payment or perhaps even paying the entire policy up front.

Many companies that specialize in homeowner's insurance policies will no longer even write a policy for someone who has a bad credit score. This industry has begun to crack down on their cliental and won't take a risk on people whose rating does not rate as good to excellent on the ratings scale.

It does not matter whether your score rates low due to no fault of your own like having an illness or divorce or if it is low because you did not pay your bills. Having a credit score that is low will adversely affect every aspect of your life.

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