Three little digits can make or break our life. Known as your credit score, these numbers can determine whether or not you can own your dream car or get a loan to go to the college of your choice. However, as important as these three digits are, many millennials are unaware of what they actually mean.
According to a recent poll conducted by LendEDU, 79.36 percent of millennials have checked their credit score at least once in their life. 36.27 percent of millennials wrongly believe they could improve their credit score by maxing out their credit card as long as they paid it on time, and 50 percent of millennials could not identify the correct range of FICO credit scores. The study revealed that millennials could use some more schooling, so here is a guide on things you may not have known about credit scores.
Things You Didn’t Know Affected Your Credit Score
Almost half of millennials surveyed believed that you could improve your credit score by constantly using their credit cards. However, this isn’t completely true. In fact, a high credit utilization rate actually lowers your score as it makes you look riskier.
Here are some other things you may not have known affects your score.
- Requesting a credit limit increase
- Unpaid medical bills
- Closing a credit card with a balance
- Renting a car without a credit card
- Unpaid parking tickets
All of these things can hurt your credit score. If you’ve done any of these things and want to increase your score, you can reach out to law firms such as Lexington Law Firm, Credit Law Center, and Credit Karma, who specialize in repairing credit. Be sure to read a review of each firm to figure out which one is best for you.
Ways You Didn’t Know Your Credit Score Could Affect Your Life
Here are some ways that a bad credit score could determine your luck of the draw in life.
- It raises the cost of your bills. Your credit score is not only a measure of trustworthiness for banks, but it also works for companies you do business with such as your cell phone provider, insurance companies, and utility providers.
- A bad credit score can affect your relationship. A survey conducted by Bankrate showed that four out of ten adults would change their mind about dating a person if they knew their credit score. Another study from the Board of Governors of the Federal Reserve also revealed that the better your credit score, the stronger your relationship will be.
- It can prevent you from landing your dream job. Once you finish college, you have the skills and credentials to obtain the job of your dreams. However, if your credit score isn’t good enough, that schooling will mean nothing. In many states, companies are allowed to run credit reports on applicants. Although this isn’t the same thing a bank would see, it can still raise red flags.
Since your credit score is instrumental in determining the outcome of your life, it’s important that you learn all you can about those three numbers.