Low credit score can hamper your prospects of getting a new loan. This is a well known fact. But nowadays there are other things that take a severe hit due to your credit score. If you aren’t aware of it, and don’t mend your ways early, it may get too late for you. The other aspects that get affected due to your low credit score are discussed below:
Getting a New Job:
Employers now increasingly want to know your credit background. This gives them an idea of your integrity. Though they need your consent to access the score, refusing them the consent may be reason good enough to rob you the opportunity. Some industries may require them as an imperative. For instance, accounting firms and financial institutions have a closer look at ones credit history because the openings here can be exploited to embezzlement and fraud. Another important thing to remember is that U.S. law permits employers to investigate your credit score. Although this law varies by state, sooner or later all US states may permit employers to carry out this check.
Getting Private Student Loans:
Credit score matters a lot with private education loan providers. You may be denied a loan for a poor credit score. The interest rate you have to pay after you pass out depends entirely on your credit score. So getting loans with a low credit score comes at a great cost. This rule doesn’t apply for state sponsored student loans, like Perkins, Stafford, and PLUS loans. But given the extent to which students are defaulting on these loans, even seeking federal loans may mandate a background check.
Buying insurance policies, in some states are set to get harder, as auto and home insurance companies will be using an applicant’s credit score to compute insurance premiums. This is because insurance companies are going by the findings of a recent report which has found out a correlation between credit score and insurance risk. In other words, if your credit score is high, it gets a lot easier to buy an insurance policy.
All this means one thing: maintain a good credit score to keep things simpler for you. If you don’t have one, it’s never too late to rebuild it. All you need to do is: not to default on bills and not to carry a credit card balance.