5 Ways Your Credit Score Impacts Your Everyday Life

What if you enter a bank, excited to apply for a loan, but end up meeting a disappointing interest rate or a rejection? This is a result of a low credit score. Credit scores are not just numbers but rather silent players in your financial story. It’s a financial reputation that follows you everywhere.

These scores can have a huge impact on your life, especially when you’re making a big-ticket purchase like a home or a car, or applying for a new credit card. Hence, a low credit score can feel like an invisible barrier, making everyday life harder than it should be. But the good news is, you can take control of it. Curious?

Let’s explore how credit scores affect our daily lives and how improving your credit score can unlock better financial opportunities. 

Here are five ways that credit scores impact your life:

1. Homeownership feels out of reach

Want to buy a home but struggling to get approved for a mortgage? Lenders see low credit scores as high risk, leading to loan rejections or sky-high interest rates. This means you’ll either need to settle for a less favorable deal or delay homeownership altogether.

Tip: Start by paying down small debts and making on-time payments to rebuild trust with lenders.

2. Renting becomes a challenge

Many Canadian landlords check credit scores before approving rental applications. A low score can mean higher security deposits or outright rejection. If you’ve been struggling to find a rental, try offering a co-signer or showing proof of consistent income.

3. Borrowing money gets expensive

Need a personal loan or a new credit card? With a low credit score, banks may charge you more in interest or reject your application altogether. The lower your score, the more expensive borrowing becomes.

Tip: Consider using a secured credit card and making small, consistent payments to build credit over time.

4. Getting a job could get difficult

Yes, some employers in Canada check credit scores before hiring, especially in finance or management roles. A low score might signal financial irresponsibility, which could cost you a job opportunity. If your credit score is low, focus on making steady improvements and highlight other strengths in your job applications.

Read: How to Improve Your Credit Score

5. Everyday bills and deposits cost more

Think your credit score only matters for big purchases? Think again. Mobile phone plans, utilities, and even internet providers check credit scores. If your credit score is low, you may have to pay extra security deposits or even prepay for services.

Cracking the Credit Score Code

Your credit score isn’t random; it’s calculated based on five key factors. Payment history (35%), credit utilization (30%), length of credit history (15%), credit mix (10%), and new credit (10%). Late payments, high balances, and too many new accounts can lower your credit score.

In conclusion, good debt means being a wise borrower. A low credit score isn’t permanent. Paying bills on time, keeping balances low, and managing credit wisely can rebuild it. Small steps today lead to financial freedom tomorrow. Remember, you're not alone in this journey. If you're facing difficulties with car loan payments, Approval Genie's PaymentAssist program is designed to provide the support you need. We offer direct financial assistance and work with you to create a personalized plan. Simply reach out to us with your documentation, and let us help you regain control of your finances. Contact us today!