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Home / Articles / The Secret Price of Poor Credit

Most people know that having good credit is important. Your credit impacts your ability to qualify for a mortgage or car loan, as well as the interest rate you’ll receive from lenders. The consequences of poor credit, however, can be less obvious — and a lot more insidious — than just having one less card in your wallet. Credit regulations vary by state, but here are some ways credit damage might cost you that you might not even realize.

Losing out on an apartment or car lease. When you apply for a rental, your landlord might run a credit check. If you have poor credit, you may not be able to get that apartment. Or, if you’re approved, you could be on the hook for a higher security deposit or an additional month’s advance on rent. The same is true of leasing a car. You might need a co-signer on the lease if you have bad credit.

Missed job opportunities. Some employers may pull a special version of your credit report as part of a background check for a job. If there are red flags on your report, you might not get the offer.

Unfavorable credit card rates. When you get a credit card, your credit score greatly influences your interest rate. If you carry a hefty balance, a higher credit score could cost you hundreds of dollars a year in additional interest payments.

Pricier car insurance. Depending on the state, you might end up paying a higher premium based on your credit score. Only seven states currently restrict the use of credit scores when determining insurance rates, so you could end up saving money on your premiums if you boost your credit score.

More expensive utility deposits. You may have to fork over a larger deposit when you set up utilities and other home services. Poor credit could mean coming up with more money up front — money you might not be able to spare.

Worse loan terms. Like credit cards, you can also end up with less-competitive rates on auto and home loans. Companies may also charge higher fees because of poor credit. Before you apply for a loan, it’s a smart move to improve your credit.

First Things First

Even if you’re not in the market for a house or credit card, it’s important to protect your credit — and improve it if need be. The first step is to check your credit from the three major credit reporting agencies by visiting to get a free credit report. If you have additional questions about your credit, contact your WellCents financial professional for advice.