Outlook Money
A poor credit score directly affects the finances by increasing the interest rates on loans and credit cards. Lenders view individuals with lower credit scores as higher-risk borrowers, leading them to hike the interest rates to offset this risk.
Insurance companies often use credit scores to assess the likelihood of claims. A low credit score can be a warning sign, leading to higher premiums for health, auto, and home insurance.
Numerous landlords use credit scores to screen applicants. Low credit scores may result in an application being denied, rejected or a request for a larger security deposit.
Electricity and internet service providers might perform credit checks for new connections. If an individual has a poor credit score, an upfront deposit may be required for the service.
To be approved for credit cards offering appealing cashback or rewards programs, a good credit score is typically necessary. With a poor score, one might only be eligible for basic cards with few benefits, thereby missing out on savings from perks like fuel cashback, travel discounts, or exclusive deals.