Your past financial decisions can affect your credit score. If you have too many instances where you didn’t pay your bills on time, took out more credit than you could really afford to pay back or let your accounts go to collections or worse, your credit score may drop significantly. You may think that your credit score is just a number, but don’t be fooled — low credit can significantly impact your ability to live a fulfilling life.

Difficulty Finding a Living Situation

With poor credit, you may not be able to secure the housing you want. Having a low credit score, especially if you have had a foreclosure in the past, can disqualify you from getting mortgages. You may end up having to settle for a mortgage with unfavorable terms such as super-high interest rates because of your credit history.

You may think that’s not a big deal because you plan to live in an apartment, but think again. Most landlords run a credit check prior to approving new tenant applications. Although some landlords are only concerned about whether you paid your rent on time somewhere else, many take the whole credit report

 into account. If you have a low credit score, you may not be able to get into apartments you really want to live in even if you have more than enough income to pay the rent. In some cases, you may also have to get a co-signer before you can move in. In short, poor credit keeps you from having the freedom to live where you want, whether you choose to rent or own your living quarters.

Higher Costs All Around

Having a low credit score can literally cost you thousands of dollars. Here are just a few of the ways you’ll end up paying extra because of credit problems:

  • Landlords may charge an extra security deposit to tenants with iffy credit histories. While you should get this deposit back upon moving out, it’s not guaranteed — plus you have to pay more up front to move in.
  • You may have to pay higher interest rates on credit cards, mortgages and other loans, which can cost you a lot more in the long run.
  • You may only qualify for mortgages, car notes or rental conditions that require you to pay more per month.
  • You won’t qualify for special financing offers that allow you to pay no interest on purchases for six or nine months. If you can’t afford to pay off your balance in full every month, this can add up to hundreds of lost dollars.
  • Security deposits on credit cards. If your credit is sufficiently poor, you may only qualify for secured credit cards. These types of credit cards require you to pay $300 or more up front in order to obtain the card. Usually, you can only get as much credit as you put into this type of card, and if you default on payments you are out the original deposit as well as being responsible for any interest payments or fees you incur.

Loss of Benefits

In addition to the higher loan costs you may end up paying if you have bad credit, you may lose money through the loss of benefits. For example, many credit card companies will deny cash back or other reward cards to customers with poor credit histories. Not only will you miss out on getting extra cash from your credit card company if you don’t qualify for these rewards, but you also will have to pay full price for flights and other common rewards offered by premium credit card companies. Monitor your credit score with TransUnion Credit Monitoring

, and if your score is low consider a credit repair service such as Lexington Law which includes a free consultation, credit score and full report. Take control of your credit score, it will save you big in the long run.