What is going on in your bank account is a function of your energy
What is going on in your wallet is a function of your consciousness
What is going on in your financial affairs is a function of your expectations
What is going on in your credit report is a function of your ATTITUDE
- Inspirational speaker/TV personality, Iyanla Vanzant
With people losing or transitioning jobs and trying to keep themselves financially afloat, personal credit scores have taken a major hit the last few years. Yesterday's 750 credit score is today's 550 headache. It is crazy how it takes so much effort to build up a great credit score (720 and above) and when only one account in collection, or a 30-day late payment shows up on your credit, it can bring down your score instantly.
It's not just a low income problem. Everyone and anyone can have a negative financial impact with bad personal credit as well. Here are a few areas it can cost you:
Car Insurance Premiums - when you change car insurance carriers and they ask for your Social Security number, expect them to pull your credit report and adjust their premiums higher. Within their underwriting process and actuarial studies, they claim that there is a correlation between how responsible you are with managing your money and how you will drive on the road.
Employment - my own media coach shared with me that once she graduated college, she ended up with lots of debt. When she finally landed an interview with a major television cable channel, they denied her a job saying, "Since you haven't shown the ability to handle your own personal finances, we wouldn't expect you to be able to handle ours!" OUCH!!
Renting an Apartment - Landlords like tenants who pay on time, in full, and don't make trouble. Your credit history might indicate that you have trouble paying on time, and could signal potential problems. Many landlords who rent to those with lower credit scores may require larger up-front security deposits, or may insist on first and last month's rent up front.
The cost of moving is expensive enough without having to add more costs due to a low credit score.
Have you head of other situations that bad personal credit affected someone's decision or circumstances?
Stay tuned for a future post on the factors that can drop your personal credit score, known as FICO, and how to quickly improve it to keep more of your own money!