By Stephanie Miller


5 Min. To Read

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If you have bad credit, there are a few impacts that you typically expect. You know that you may have trouble getting certain credit cards, and you don’t expect to earn the lowest interest rates on loans. However, there are a few further-reaching impact that you may not even expect… some of which aren’t even financial in nature!

Here are six surprising effects that your bad credit can have on you, and why they matter.

Auto Insurance

Your driving record is the best indicator of what kind of driver you are, and is one of the biggest factors involved in calculating your auto insurance premiums. But you might be surprised to learn that your credit can also play a role, and even increase your premiums, if you have a low score.

Auto insurance companies will consider your driving history, age, location, and even the car you drive when deciding how much they are going to charge you for your coverage. If you happen to have negative reports on your credit or a low score, though, certain states are allowed to use that as a price-determining factor.

Not all states can use your credit when calculating premiums, and it has to be a secondary factor for those that can – meaning that it is only considered after things like your driving record, age, and location. Plus, an insurance company can’t deny you coverage or cancel your existing policy just because of credit-related factors. You can absolutely see a jump in price due to your credit score, though!

Homeowners Insurance

Your car insurance provider isn’t the only one interested in your credit score. Homeowners’ insurance companies will often run a soft inquiry to see where you stand and if you have any negative reports in your past. If you do, you could easily see this result in a higher price for premiums.

A late payment on an account a few years ago might not seem (to you) like that big of a deal. After all, it doesn’t mean that you would mismanage your homeowner’s insurance policy or ever miss a payment. But to the issuer, irresponsible credit management can sometimes point to irresponsible people… and irresponsible people can cost insurance companies more money.

The better your credit, the better your insurance rates will be across the board.

Security Deposits

An account in collections or a few past late payments can make lenders wary. It can also raise eyebrows among service providers, leading them to request security deposits before they’ll open accounts for you.

Whether you want a new cell phone plan or just need to turn the utilities on at your next home, your credit can definitely come into plan. If providers have any concerns about your ability (or willingness) to pay in full and one time, they may request security deposits when opening your accounts.

While these deposits are refundable after a period of time (or when you eventually close your account), it can still be more cash than you’d like to tie up.

Love Life

If you have poor credit – whether due to something big like a bankruptcy or just a few late payments in the past – the effects can be far-reaching. In fact, you could even see an impact on your love life!

Recent studies have found that debt and poor credit are significant factors when evaluating a potential new love. More than 30% of Americans would even reconsider getting serious someone if they had issues with things like credit card debt.

Your Job

The last time you interviewed for a new job, you probably practiced the usual questions. After all, potential employers usually want to know where you see yourself in five years, what you consider to be your biggest weakness, and how you’ve handled colleague conflicts in the past. But does your credit usually come up in conversation?

While employers won’t usually ask you flat-out about your financial history, it’s becoming more and more commonplace for them to run your credit report. If you have a poor score, defaulted accounts, or carry around a lot of debt, you might risk appearing desperate, irresponsible, or looking like a poor decision-maker. And your bad credit could cost you the job.

Your Health

Money is often a source of stress for adults, whether it’s needing more of it, remembering to pay bills, or planning for retirement. But if you have bad credit – and the other money woes that typically accompany it, such as high levels of debt – you are probably more stressed than most. And this can begin to impact your overall health.

A shocking 64% of Americans recently admitted that money woes are responsible for the largest percentage of their everyday stress. When you consider the health impacts that constant stress can have – such as lack of sleep, depression, anxiety, weight gain/loss, heart disease, and more – it’s easy to see how bad credit can be detrimental to your health.

A low credit score or less-than-desirable score is something you should avoid for a number of reasons. Not only bad credit shut financial doors for you and cost you more money, but it could also impact your job, your health, and your relationship. This is yet another reason why monitoring and improving your credit should always be an important goal!

If you have bad credit, there are a few negative things that you typically expect. Here are six surprising effects that your bad credit can have on you, and why they matter.

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