A credit score is a three-digit number that evaluates a consumer’s creditworthiness and is used by lenders to assess the person’s ability to repay their debts. Therefore, the higher credit score, the better.
For example, your credit score influences your ability to get a mortgage and how high or low your interest could be. Lenders often give lower interest rates or larger loan amounts to those with good scores because they feel more confident the debt will be repaid.
You can learn more about this here: The Good, the Bad, and the Ugly of Mortgage Credit Scores.
But things like mortgages and car loans aren’t the only things your score can influence. Here are three surprising ways your credit score matters!
1. Hiring decisions by employers
Some employers, particularly in the financial sector, may consider your credit as part of their hiring decision process. To be precise, employers look at credit reports rather than credit scores – which contain past information about things like credit cards, mortgages, and student loans.
The use of credit reports in hiring varies by company and profession, and laws that affect how and when employers can check credit reports can vary from state to state.
2. Electricity, gas, water, and cable/satellite TV
Utility companies might look at your credit score when you sign up with them. That’s because they feel you are, in a sense, “borrowing” services like electricity and television equipment.
3. Better credit cards with better rewards
Credit card companies use credit scores to help them decide what kinds of accounts they offer people. This can mean a lower interest rate or a larger line of credit. It can
also mean different incentives and rewards like cash back, frequent flyer miles, travel points, or balance transfers. Remember, using credit cards responsibly is important to keeping your credit score in good shape.
If you’re thinking about becoming a homeowner, click below to get a better idea of what your credit score could mean for you, your loan, and your mortgage rate.
Ditech is not a financial advisor and the ideas outlined above are for informational purposes only. They are not intended as investment or financial advice and should not be construed as such. Consult a financial advisor before making decisions regarding important personal financial matters, and consult a tax advisor regarding the deductibility of interest and tax implications.