Master Debt


Whether you realize it or not, your credit score plays a big role in your everyday life.

Your credit score (which is more commonly known as your FICO score) is a figure ranging between 300 and 850 (where a higher number is more preferable) that represents your creditworthiness to lenders. It takes into account factors such as:

  • Your ability to make payments on time
  • How much of your credit you utilize
  • What type of credit you have
  • How long you’ve have your credit accounts
  • How many new credit accounts you have

After adjusting for the most important factors (your ability to make timely payments and your credit utilization), the three major credit bureaus each establish their own credit score for you. It’s not uncommon for your score to differ slightly at each credit bureau.

Your goal should be to have a “prime” credit score since lenders are more willing to lend and offer their best rates to consumers that fall into the prime category. The definition of prime is a bit different among the three bureaus, but we’re typically talking about a score above 681. “Near-prime” consumers, or those with FICO scores between 621 and 680, are often able to find lenders, but they rarely get the same attractive interest rate offers as their prime counterparts. If you fall into the “subprime” category, or a FICO score of 620 or lower, it’s possible lenders could offer very high interest rates or choose not to lend to you at all.

Surprise! Your Credit Score Affects This as Well

Most Americans are fully aware of the traditional impacts that a good or bad credit score can have on their ability to obtain a mortgage, refinance an existing home, or obtain a credit card. Lenders are going to want the assurance that you can meet your debt obligations, and a low credit score could keep you from becoming a homeowner or even obtaining a credit card.

But there’s much more that your credit score can affect that you may not even be aware of.


Maintaining a good credit score is important if you want to find a place to live, period. Not only do banks and mortgage companies look at your credit history if you’re looking to buy a house or condo, but a landlord looking to rent to you is allowed to examine your credit history. A TransUnion study from 2015 pointed out that nearly half of all landlords consider a credit check to be among their three most important factors when deciding whether to accept a tenant’s lease application.

Landlords can use your credit history to determine if you make your payments on time, as well as decipher if you have any account charge-offs or repossessions. Small mistakes, like missing a payment, may not cost you the house or apartment you’re trying to rent, but charge-offs and repossessions can be deal-killers with landlords (not to mention they can crush your credit score).


Your credit history can also affect your ability to get a job. According to NerdWallet, a 2012 survey from the Society for Human Resource Management found that 47% of employers check potential new hires’ credit reports as part of the hiring process. However, you should be aware that you need to give written permission to a prospective employer to access your credit reports, and that 11 states bar employers from access prospective hires’ credit reports.

What are employers looking for, you wonder? They won’t be able to see your credit score or personal account information, but they should be able to get an idea of your trustworthiness based on your ability to meet your debt obligations. NerdWallet points out that screening credit reports for prospective new hires can “decrease the likelihood of theft and embezzlement and reduce legal liability for negligent hiring.”

In other words, a bad credit score could deny you the job you want.


You may not realize it, but some auto and homeowner insurance companies can access your credit score to justify charging you a higher or lower price. Why? Insurers have discovered that there’s a statistical correlation between a person’s credit score and their propensity to file a claim.

For instance, in 2003 the Bureau of Business Research at the University of Texas’ McCombs School of Business found stark car insurance expense differences based on consumers’ credit scores after reviewing more than 175,000 auto policies. The researchersfound that the average consumer cost auto insurers $695 a year in 2003. Comparatively, customers with the highest credit score averaged a cost to insurers of $558 a year, while consumers in the bottom 10 percentile cost an average of $918 a year.

If you have a relatively low credit score, your insurer could view you as a greater risk than the average consumer.


Here’s the good news: Your credit score, regardless of how bad, can’t affect your ability to get electricity, water, cable, internet, or even cellular service. However, utilities can access your credit report to determine your trustworthiness as a customer. If a utility observes that you have a history of being late on your accounts, or that you have other negatives on your credit report, it can require you to put a deposit down prior to commencing service.


Lastly, a poor credit score could adversely impact your love life.

A 2013 survey from U.S. News & World Report found that three in 10 women and two in 10 men would not marry a person with a poor credit score. Comparatively, 90% of respondents said that financial responsibility was a key attribute when considering a life partner. Having a poor credit score isn’t necessarily going to stop you from meeting the person of your dreams, but according to this data, it could keep the relationship from lasting a lifetime.

This article was written by Sean Williams from The Motley Fool and was licensed from NewsCred, Inc. Santander Bank does not provide financial, tax or legal advice and the information contained in this article does not constitute tax, legal or financial advice. Santander Bank does not make any claims, promises or guarantees about the accuracy, completeness, or adequacy of the information contained in this article. Readers should consult their own attorneys or other tax advisors regarding any financial strategies mentioned in this article. These materials are for informational purposes only and do not necessarily reflect the views or endorsement of Santander Bank.

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