credit affectsCredit is like an invisible shadow that follows each of us around throughout our lives. For those who have good credit, the shadow is present in the background and not noticeable unless you’re actively seeking a loan or applying for a credit card. On the other hand, for those with bad credit or no credit, it can seem like an always-present force that presides over every aspect of life. While credit doesn’t touch every aspect of life, it impacts a surprising number of aspects in our day-to-day lives. Keep reading to learn more and see what aspects of life credit touches.

What ways can credit impact your life?

Believe it or not, credit reports can affect matters well outside the realms of borrowing and using credit. Here are six ways that credit affects your life:

Your ability to find housing

You probably realize that home ownership requires good credit, given that most people need to secure mortgages to cover the cost of buying a home. But the landlords of apartments and other rental units also check applicants’ credit. While not every landlord does this, it’s a common enough practice that most tenants should simply be prepared for it. On the plus side, credit can work the other way, too, when it comes to housing. If you pay your credit-related bills or mortgage on time, your credit scores may be positively impacted by this information.

Whether or not you land a job

In addition to requesting references from friends and colleagues, some employers might run credit checks or background checks when you apply for a job. This is especially common for roles that involve handling money or making financial decisions in any capacity, so you should be prepared for the possibility depending on what field you’re hoping to work in.

Your ability to get insurance

Insurance services, especially home and auto insurance, partly rely on something known as an insurance score. This score is a metric that correlates your credit scores to your insurability or your risk to your insurer. Bad credit scores won’t necessarily prevent you from getting insurance, but they will make your premiums much higher. Conversely, having good credit scores can go a long way to reducing the cost of your insurance.

Your access to banking

It’s know secret that your credit directly impacts your ability to get a credit card or loan, but most people don’t know it can also impact your bank account. Although banks typically look at your banking history at other institutions, through platforms like ChexSystems and Early Warning Services, when deciding to provide you with a new checking or savings account, some banks might decide to evaluate your credit reports in addition to (or instead of) your banking history. Since banks have the option to check your credit reports, you will want to be prepared and know what’s on your credit reports before you try to open a new bank account.

Your utility bill

You might not be aware, but in many cases, cell phone and utility services (e.g., gas and electric companies) look at your credit in order to determine how reliable a customer you’ll be. Bad credit won’t necessarily prevent you from getting service, but you’ll likely have to provide a deposit to the utility provider before being able to open an account with them. These deposits are gauged based on your credit, and they can be on the steep side, which could serve as a nasty shock when you attempt to get new service.

Your love life

Yes, even cupid cares about your credit. Not only does credit affect your post-wedding finances, but it could affect your chances in the dating game as well, given that a lot of single people consider good credit an important characteristic in a partner. This goes double for those with a divorce under their belt, as it can negatively impact your credit.

How can you deal with the effects of bad credit?

If you have bad credit, it’s very likely that it’s impacted your life in all or most of the aspects noted above. Even worse, some of these negative effects, like increased insurance premiums and higher loan interest rates, can increase your financial burdens and contribute to a cycle of bad credit.

One of the most important things you can do to help yourself is to take a look at your credit reports. Even if you know you have bad credit, it’s possible that credit report errors could be unfairly dragging your credit scores down even further. For example, you may have been the victim of identity theft and not even realize it. Looking at your report will also help you come up with a credit improvement strategy and decide on what actions to take to start rebuilding. For example, a secured credit card is a useful tool to help you improve your credit (with responsible use of the card), since most report timely payment behavior to all three credit bureaus, depending on the card you select.

Ultimately, credit reports and scores are a part of our lives, and everyone’s individual situation is personal and unique to them. Keep in mind, the longer you wait to take action, the longer you might continue to experience the negative effects of bad credit. On the other hand, if your credit is in good shape, you can work on keeping it healthy by continuing to use credit responsibly and paying your bills on time (and in full — if possible).

For more information about checking your credit reports, visit our credit monitoring reviews.