When you reach eighteen and become an independent adult starting out in the world, money can be a bit of a minefield. All of a sudden you’re responsible for your own finances, and you can have companies contacting you asking if you want to take out loans, store cards and credit cards. Not knowing the consequences, so many people fall into debt, and over time massively impact their credit score. Knowing how important your score is and how it can affect your lifestyle could be enough to deter you from making this mistake. Here’s how your credit score can impact your life.

You Won’t Be Able to Get a Mortgage

Getting a foot on the property ladder is one of the best things you can do in your adult life. It gives you financial security and enables you to put your funds into a building you will eventually own. Once your mortgage is paid off, you have somewhere to live cost – free later in life, which is useful when you retire. With a poor credit score, chances are you won’t be able to get a mortgage at all. Mortgage companies are very selective, even a few missed payments can be enough for them to turn you down.

You Can Struggle Renting a Place Too

So you can’t get a mortgage, your next step would be to rent a place… right? This might not be so simple either. If you go through an estate agent, they will often run credit checks before you’re accepted to check that you’re not going to go awol and not pay your rent. With a poor credit score, you can massively reduce your chances of being accepted by landlords and can struggle moving out.

You Could Be Rejected for Car Finance

Cars can be so expensive, not just the latest and greatest model but even a simple little runaround can be pricey enough. The older the car the cheaper it’s likely to be, but this can also affect its reliability which can cost you more in repairs. Sometimes, taking out car finance on a better model can save you in the long run – but it’s not always an option if your credit is poor. You might end up in a position where you can only afford an old and unreliable model or maybe even not be able to get one at all. This is going to seriously impact your life and even your job prospects. A car on finances allows you to spread the cost by paying monthly, and snagging yourself a newer and better vehicle.

You Won’t Be Able to Access Credit Cards or Loans When You Need Them

It’s easy to have the attitude that ‘my credit score is poor but it’s fine – I’ll just never use credit.’ However, life can sometimes throw us a curveball. If you need access to instant cash in an emergency then it won’t always be plain sailing. There are lenders who will consider those with a less than perfect score, but be sure to do your research. Find what rate you’re being offered and read reviews to find a good one. If you read reviews of Knight Capital loans for example you’ll see that previous customers have been happy with the company.

You’re Likely to Get Rejected for a Phone Plan

We live in a digital age, smartphones are no longer a luxury but a total necessity. So when you’re not able to even take a phone plan out in your name, it can be a problem. Unless you have a kind relative willing to take one out for you, you’ll be stuck with second hand handsets with rubbish battery life and whatever sim – only deal will accept you. Mobile phones these days are incredibly expensive, and providers aren’t going to give handsets and contracts to just anyone. They need to know that their customers are going to pay up, and the debt won’t end up being chased through debt collection and other methods.

Improving Your Credit Score

If you’ve already affected your credit score then it’s time to look at damage control. Cut up your cards and come up with a plan for paying them off. If you’re seriously struggling, contact your creditors and come up with an agreement so they won’t give you a default. A lot of the time, all you can do is wait it out for negative entries to drop off. The trouble is, this takes six years so prevention is better than cure!