Your mortgage's interest rate

Your credit score has a considerable impact on the mortgages you qualify for and how much they will cost you because your mortgage is probably the largest loan you will ever take out. Low credit scores are a sign of potentially risky financial behavior and will almost certainly result in increased interest rates and, in some situations, outright loan rejection for applicants.

Even while a slight adjustment in the interest rate you pay might not seem like much, since many mortgages have terms of 25 to 35 years, it adds up to thousands of dollars in additional costs.

Getting the desired rental property

Not yet purchased a home? Your choice of housing is still influenced by your credit score. Your credit score is the second most crucial aspect in determining whether your rental application will be approved, right behind your earnings-to-rent ratio. The candidate with the higher credit score will always be chosen over another application with comparable wages since landlords are aware that by lowering their risk, they may save money.

The vehicle you drive

The average annual percentage rate (APR) for auto loans in 2017 was 4.21 percent, with the majority of loans having an APR between 3 and 10 percent. The difference between having good credit and having bad credit is even greater: Some people with excellent credit may still qualify for 0% APR, while those with really bad credit may be charged up to 20%. The difference between the two can easily be in the hundreds of dollars per year or even thousands.

Refinancing alternatives

What seemed like a decent deal a few years ago may rapidly turn into an expensive proposition as interest rates fluctuate; by refinancing your mortgage or student loan, you can save a ton of money. Unfortunately, if you have bad credit, this can be difficult or impossible for you to do.

It also doesn't matter what your credit score was when you initially applied for the loan. When applying for a mortgage, many applicants have outstanding credit scores but later engage in unethical behavior. Their alternatives are limited and they receive a bad surprise when they try to refinance due to their suddenly lower credit score.

Your employment options 

What seemed like a decent deal a few years ago may rapidly turn into an expensive proposition as interest rates fluctuate; by refinancing your mortgage or student loan, you can save a ton of money. Unfortunately, if you have bad credit, this can be difficult or impossible for you to do.

It also doesn't matter what your credit score was when you initially applied for the loan. When applying for a mortgage, many applicants have outstanding credit scores but later engage in unethical behavior. Their alternatives are limited and they receive a bad surprise when they try to refinance due to their suddenly lower credit score.

Obtaining student loans

If you've previously repaid your federal student loans in full, you'll probably need to take out a private loan to cover the remaining balance of your tuition. Like a home or auto loan, these private loans—whether they're from a bank, credit union, or school—are influenced by your credit score. Students who have only ever dealt with federal loans (which are not impacted by credit score) may find this to be unexpected.

Your student loan repayment will undoubtedly take years, and a bad credit rating might increase the cost by thousands of dollars.