Most people’s eyes are fixed on the words “credit score”. Of course, it’s boring. It’s confusing. But ignoring it can make your financial life difficult. And it can also affect your social life.
We often forget the social impact of credit, but it exists nevertheless. For example, a Bankrate poll found that 42% of people said knowing someone’s credit score would affect whether or not they went on a date with that person. A respondent said:
Bad credit could indicate deeper issues of irresponsibility. They may be unstable in other areas of their life.
Obviously, there’s a lot of judgment here.
Another 2015 study by researchers from the Federal Reserve Board, the Brookings Institution, and UCLA linked bad credit to divorce. Moneyish reported:
The higher your credit score, the less likely you are to separate from your partner, and vice versa. In fact, for every 105 point increase in a person’s credit score, there is a 32% drop in the likelihood of divorce. “Couples with the lowest initial mean scores are two or three times more likely to separate than couples with the highest mean scores, and the likelihood of separation largely decreases as the scores increase,” the report revealed. ‘study.
Obviously, there’s a huge correlation/causality argument to be made here. A low credit score itself is probably not causes a relationship to go south, but according to the study, it’s a good predictor of a bumpy road ahead. This is likely because bad credit and financial stress usually go hand in hand.
Bad credit can make it difficult to get a job, rent an apartment or buy a car. Your bills can be higher with bad credit. Money is already a predictor of divorce, so these drawbacks certainly don’t help the situation.
Either way, you want to get an idea of what your score looks like in the first place, and the good news is that it’s easier than ever to get a free copy of your credit score. If you’re a Mint.com user, for example, you can sign up for a free credit score update every few months and you’ll see it right in your overview. Discover cardholders also receive an update of their score on their monthly statements.
Other, WalletHub and CreditKarma are two reputable services that can help you track your score.
It’s not just about your score, however. You also want to get a (free!) copy of your credit with each report every year (and you can do it at annualcreditreport.com). Review it for any negatives and areas for improvement. We told you how to decipher it here.
If your credit isn’t great, the best way to improve it is to pay your debts in full and on time each month. Beyond the obvious, however, we’ve written a few guides that can help: