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Can Your Credit Score Affect Your Quality of Life?

, by Rob Kaufman

Most consumers know the score (no pun intended): If your credit score is good, you'll most likely get the loan you need with a decent interest rate. If your credit score is low, you'll probably be rejected for the loan. Or if accepted, you'll possibly pay higher interest.

What most consumers don't know, or take into account, is how much their credit score can affect their quality of life. From job to a family to relationships and more, your credit score can impact your life in ways you haven't considered.

The effects of your credit score.

Credit scores are calculated using 5 specific elements of your credit reports. How you manage these five elements determines your credit score which in turn determines many of life's ups and downs. Simply stated: the higher your score, the greater the number of "ups". The lower your score, well... you get the picture.

Let's begin with relationships.

Money issues are the third leading cause of divorce. Some of the reasons behind this tend to revolve around how one person, or the other, handle finances. If one of you is fiscally responsible and the other isn't, arguments begin and resentments fester. Plus, there's a lot of stress when trying to get a mortgage or your budget has fallen into debt. If your credit score is low and you're looking to purchase a home or get out of debt, the stress increases and starts to move into other areas of your relationship. Getting everyone on the same page of financial management can help stop problems before they temporarily - or permanently - ruin your relationship.

We'll continue with employment.

Okay, first, most employers typically don't check your credit report before hiring you. However, those employers who do check your report may have their perception about you negatively impacted if your report shows you have a troubled financial history. This is especially true if part of your potential job might revolve around financial responsibilities. Keep in mind that credit bureaus don't typically share your credit score with employers. Yet if an employer asks to see your credit report, the bureaus will send them a variation of your report that's specifically created for employers.

And then there are your utilities.

When you apply for utilities like water, electric, gas (even Internet and cell phone service), it's just like applying for credit. This means that these companies will check your credit history and credit score and make their decision accordingly. How does this affect your quality of life? If the utility or phone company discover that you've had a checkered past of paying bills on time, they may ask for a deposit. That deposit takes more money out of your budget. In this instance, if you keep your payment history clean, you'll be able to have more peace of mind

Lastly, are you looking to rent?

Landlords want to know that you'll be able to pay your rent... on time... every month. That's why they'll check your credit report and score to check for past late payments, evictions and current debt burden. Combining all of these factors gives them a good financial picture of your payment history and whether or not you'll make a good tenant. Having a good credit score in this instance can help ensure you won't have to put down any additional deposits and can keep that money for better use.

myFICO members with both high and low credit scores know all too well how much their scores can affect their quality of life. See for yourself at myFICO forums.

Rob Kaufman

Rob is a writer... of blogs, books and business. His financial investment experience combined with a long background in marketing credit protection services provides a source of information that helps fill the gaps on one's journey toward financial well-being. His goal is simple: The more people he can help, the better.