How Does Your Credit Score Affect Your Financial Future?
Wednesday, January 16, 2019, 6:00 AM | Leave Comment
Your credit score is just a number that can be poorly understood for how it’s derived. That little number can make a huge difference when it comes to your financial future.
Here are some of the ways that your credit score has an impact on your finances.
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Ability to Borrow
A poor credit rating can limit your ability to take out any kind of loan. This would include things like getting a mortgage, a new car, student loans, or even taking out a line of credit. The financial industry values this number because it gives them a snapshot of your ability to handle your personal finances. It’s dictated by things like paying on time, how much debt load you carry, and the length of your credit history.
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Bondable Options
In many types of jobs, cash handling is required as a part of your job description. In order to be bondable, a check of your credit is performed. A poor credit rating could limit the types of jobs in which you can qualify. This can have an exponential impact on the rest of your life because you’ll have to find a job that may limit your career options. You may find yourself stuck in a job that doesn’t allow you to plan for the future because of your poor credit score.
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Interest Rates
Another thing that your credit score can dictate is the interest rate that you can qualify for when it comes to receiving a loan. A lower credit score tends to correlate to you having to pay a higher interest rate. This can limit your ability to pay back the loan in a timely manner and can impact your credit score further. You may find yourself having to wait on your dreams because your financial picture can’t support them at this point in your life. Using a company to boost my credit score may help with this type of situation.
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Payment Plans
The type of payment plan that you can qualify for on items such as a new phone can also be impacted by your credit score. The phone company may deem you higher risk when you have a lower credit score. This can limit your ability to get a lower payment on your cell phone plan. Just as with higher interest rates, you may find yourself expending more of your income paying monthly bills and not being able to save for the future.
This innocuous number can have larger implications for your financial future. Take steps to raise your credit score in order to improve your ability to get the things that you want out of life.
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Rachelle Wilber is a freelance writer living in the San Diego, California area. She graduated from San Diego State University with her Bachelor’s Degree in Journalism and Media Studies. She tries to find an interest in all topics and themes, which prompts her writing. When she isn’t on her porch writing in the sun, you can find her shopping, at the beach, or at the gym. Follow her on twitter and Facebook.
