4 Little-Known Ways Bad Credit Can Cost You

4 Little-Known Ways Bad Credit Can Cost You
Photo by Twin Sails / Shutterstock.com

What do utility deposits and car insurance have in common?

They’re among expenses that are costlier for folks with bad credit — but many Americans don’t know that, a recent NerdWallet survey shows.

Conducted by Harris Poll, the survey of 2,250 adults in the U.S. found there’s a lot Americans don’t know about how bad credit can cost them money or limit their options.

For example, having bad credit can negatively impact:

  1. The cost of your utility deposits — although 52 percent of survey respondents didn’t know that
  2. Your options for cellphone service — 49 percent didn’t know
  3. The price of your car insurance — 43 percent didn’t know
  4. Your ability to rent an apartment — 23 percent didn’t know

This is because utilities companies, phone service providers, insurers and landlords often run credit checks. And as Money Talks News founder Stacy Johnson recently wrote it in “The True Cost of Bad Credit“:

“… like it or not, these things are facts. So it quite literally pays to keep track of your credit and keep it in the best possible shape.”

What constitutes bad credit?

The best known credit scores are those created by Fair Isaac Corp., aka FICO, with the one called “FICO Score 8” being most commonly used.

FICO Score 8 ranges from 300 to 850. Here’s how FICO breaks down that range:

  • 800 or higher: Exceptional
  • 740 to 799: Very good
  • 670 to 739: Good
  • 580 to 669: Fair
  • 579 or lower: Poor

Stacy adds, “Keep in mind that … you’ll generally need a score of at least 730 to 760 to get the best possible rates on loans, depending on the lender.”

How to improve your credit

If you haven’t checked your credit reports or credit score recently, that’s the first step.

The three national credit reporting agencies — Equifax, Experian and TransUnion — all keep credit reports on consumers. Federal law requires them all to provide you with a free copy of your credit report once a year, which you can obtain at AnnualCreditReport.com.

Credit reports do not include credit scores, however — at least not for free. So check out “8 Ways to Get Your FICO Score for Free” and “These 19 Card Companies Offer Free Credit Score Info.”

If you find your credit score lacking, also check out “Boost Your Credit Score Fast With These 7 Moves” and Stacy’s article “How I Got a Perfect 850 FICO Credit Score.”

Did you realize bad credit could affect your utility deposit or car insurance? Let us know below or on our Facebook page.

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