Why Should I Care About My Credit?

Everyone experiences the occasional financial hardship from time to time — unexpected bills like car repairs or housing expenses can take a real toll on your budget. And sometimes, financial hardships might cause you to miss a payment or rack up your credit card balance.

If you’re in debt or behind on payments, you might think that your credit score doesn’t really matter all that much. But in reality, raising your credit score can actually improve your overall financial situation, save you money and more.

Your credit score has a much bigger impact on your life than you might realize. Read on for five convincing reasons why you should care about your credit and what you can do to raise your score.


1. Credit Determines What You’ll Pay

When you use credit, like a credit card, store card or personal loan, you’re agreeing to borrow money with interest. Lenders, banks and other financial institutions decide how much interest you’ll pay based on your creditworthiness, meaning, the likelihood that you’ll repay the funds.

The lowest interest rates and best offers are typically reserved for those with good or exceptional credit scores; they can get more attractive rates on anything from auto to personal loans, credit cards and home mortgages.

Lenders assume a bigger financial risk when granting loans to people with fair or bad credit, so borrowers in lower score ranges usually end up paying more interest. And if you have no credit history or a very poor score, it might be harder to find a lender that will extend a loan to you.

Contract service providers like cell phone carriers and internet providers may also check your credit score. If you have poor credit or no history at all, they might require you to pay additional deposits or fees.


2. Credit Can Play a Part in Employment Decisions

Employers may also require credit checks as part of pre-employment background screenings. Though your job may not have anything to do with finance, good credit can be a sign that you’re a responsible candidate, but poor credit can send a negative signal to your prospective employer.


3. Credit Can Help You Get an Apartment

Since your payment history is the biggest factor in how your score is calculated, a good score is an indicator that you’ll pay your rent on time. On the other hand, landlords may require you to have a lease cosigner if you have bad credit. They could also reject rental applications or require hefty advance fees for those with very poor credit.


4. Credit Stays With You for Life

Your credit history is first established when you use a form of loan — credit cards, student and personal loans all count as credit. Statistically, older generations tend to have higher credit scores than younger people who are newer to personal credit.1

A long credit history, low credit utilization and a responsible payment history all positively impact a person’s score. So when you use your first credit card or loan, your payment history and credit usage have a much bigger impact on your credit score than you might realize.


5. Credit Can Help You Advance

You may want to borrow money in the future, so why not help yourself save money? While there’s nothing you can do to change the past, you can definitely change your behavior and improve your credit! If you’re looking to raise your score, knowing exactly how a credit score is calculated, what your score means and how to access your credit report for free can give you an advantage.

In short, acknowledging the factors that impact your score can help improve it. It can set you up for success in the future by allowing you access to better financing rates, better home options and more.



1Lembo Stolba, S. (2019). What Is the Average Credit Score in the U.S.?


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