4 Ways Bad Credit is Affecting Your Life and Happiness — And How to Fix It

Credit scores aren’t usually thought of as a big factor in your happiness. But having a good credit score gives you choices, which can help create happiness.

With a good credit rating, (which Equifax states should be at least 466) you can have your dream car, flat, even your dream job. But none of these are attainable with a bad credit rating. Before that freaks you out, this article, will break down how poor credit can affect your life but also how you can take charge of it.
Good credit rating

How Bad Credit Affects Your Life

The average credit scores among age groups vary. Understandably so, The Guardian reports that young adults have lower credit ratings than those in other age groups. But more surprisingly, people aged 26 to 30 on average have lower credit scores than 18- and 19-year olds due to it naturally decreasing until you reach 55. Regardless of which age group you belong in, raising your credit rating should be one of your main priorities. That’s because your quality of life and your happiness will be more affected by situations caused by a poor score:

1. Not Getting the Home of Your Dreams

You don’t want the house of your dreams to remain in your dreams. But if you have a bad credit score, then you might have to sacrifice it because you’re less likely to be approved for a mortgage. Some landlords may also reject you from moving into a new flat or home if you have a poor credit history. This can prevent you from living closer to your workplace or enjoying the luxury of having your own private space.

2. A Long-Term Relationship with Public Transportation

You might have to learn how to love the good old tube here. If you have a bad credit history, you may get denied for a car loan. So instead of saving a lot of time by driving yourself to and from your destination, you will have to find ways to pass time and entertain yourself while the metro gets delayed. Again.

3. Rejected Career Opportunities

You won’t only get rejected by banks and financial institutions, you may also get rejected by prospective employers—especially if you plan to work in finance. Some employers will check your credit history as part of their background check. Nerd Wallet points out that this checking is to look out for signs that can increase the risk of criminal behaviour at work (like theft or fraud). A poor credit history can definitely affect your life by preventing you from advancing in your career or from earning more money.

4. Paying off Higher Loan Interests

Good news: you won’t be instantly rejected because of a poor credit score. Some financial institutions may still approve your credit card and loan applications. The bad news, however, is that the interest rates would be significantly higher. Instead of having a savings fund that can make you secure or enjoying experiences that can make you happy, you will have to spend more money on paying off your debts.

How to Improve Your Credit Score

You’re only a few numbers away from having a new house, car, or job! But to actually get to that point, you’ll need to improve your credit rating. Here are some ways you can improve your credit score as detailed by Petal:

• Start to pay off balances on time;
• Then automate your payments so that you’ll never miss any due dates;
• Budget your money and improve your score by keeping your utilisation ratio below 30%;
• Also ask your utility and phone providers to report your good payment history to credit bureaus;
• Seek help using a debt consolidation plan.

Most importantly, if you have a bad credit history, then you have to take the time to reflect on your old spending habits. I talked about financial difficulties in a previous blog post here. I emphasised that you need to examine your old habits so that you can leave behind the unhealthy financial practices and start anew. Learn from your old financial mistakes so that you can lead yourself towards an abundant and happy life.

Life would certainly be better when you’re surrounded with a few (or all) of your favourite things! Through a good credit score, might help you reach all of your goals.