Who Cares About Your Credit Score?

Checking your credit score is a little bit like eating your vegetables: Some people genuinely love doing it, others force themselves to and the rest of us write it off as unimportant. After all, your physical and financial health is a personal thing.

It may seem like your credit score and how you manage it is nobody else’s business. You may think your credit score doesn’t matter, because you don’t use credit cards, you don’t have a huge need for accessing credit or you don’t care much about the difference a credit score makes in the interest rates you qualify for in the event you need a loan. The truth is, your credit score can have a bigger impact on your life than you may think it does. Here are some examples of people who care about your credit score…

The Credit Card Company

Credit cards may be one of the most polarizing things in personal finance — many consumers love them, plenty of people avoid them, and a huge number of people go back and forth between enjoying cards’ convenience and loathing the debt they fell into as a result.

As great as credit cards are for helping consumers build credit and finance some expenses, they’re not a necessity. Much of the convenience credit cards offer can be found on debit cards, so if you never want to deal with credit cards, you don’t have to.

However, if you ever want to open a credit card, having a good credit score certainly helps. The better your credit score, the more options you’ll have when trying to find a card, and the better the interest rates you’re likely to qualify for. Consumers with bad or no credit scores may be able to get a credit card, but that can require paying a deposit to the credit card issuer, or an annual fee — not to mention higher interest charges if you don’t pay off your bill every month.

The Car Dealer

Cars are expensive, and most people have to buy several vehicles in their lifetimes. Unless you’re able to pay cash for every single one, you’ll need an auto loan, and your ability to get one of those depends heavily on your credit score.

To finance a car purchase you need a loan, and a potential lender will want to know your credit history. Your credit score is a huge part of determining how much you can borrow, what interest rate you will be charged on that loan and how much your monthly payment for that car loan will be.

The Mortgage Lender

Buying a home without a mortgage is possible, but that requires a heck of a lot of cash. Considering how difficult many Americans find it to come up with even a 20% down payment, paying all-cash for a house is out of reach for most.

Given that reality, if you want to buy a home, you’re probably going to need a loan. Getting a mortgage is no simple task, even for people with stellar credit, so if your credit score isn’t great, you’re looking at further complicating one of the most complicated personal-finance tasks out there.

Your Future Self

Living without credit is doable, but if you take out a few loans here and there throughout your lifetime, you should know that your credit score could have a huge impact on your net worth. Because your credit score determines the interest rate on things like home, auto and some student loans, a lifetime of great credit could translate into a minimal interest burden and hundreds of thousands of dollars in savings, when compared to what you could have paid because of a lower credit score. You can see the difference yourself if you play around with the numbers in our Lifetime Cost of Debt calculator. The average person pays $279,002 in interest — yep, just interest — in his or her lifetime, and that number can shift significantly if you have a better- or worse-than-average credit score.

A good credit score means you may be able to put more money toward other goals like retirement, travel or debt-free education for your kids — even if you don’t think much about your credit score, you should think of how it indirectly affects your family. In a few decades, you (or those close to you) can either be pleased or angry with you for how your credit score affected your cash flow, but the first step is to know where you stand today: You can get two free credit scores every 30 days on Credit.com.