The Muddled Relationship Between Your Health Initiatives and Credit Score

You probably never thought that trying a new diet could affect your credit score. Or that your credit score could affect your health. Here are some things to think about.

August 2, 2019
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When you start trying out new diets or other health fads, you will discover that there are a lot of things to keep in mind. One thing that you probably neglected to consider is the relationship between your diet and credit score.

The Confusing Relationship Between New Health Practices and Your Credit Score

You probably never thought that trying a new diet could affect your credit score. Or that your credit score could affect your health. Here are some things to think about:

  • When you try a new diet, skincare treatment or other health fad, you might end up subscribing to an auto-billing company. This could hurt your credit if you aren’t tracking your payments.
  • A poor credit score could make it more difficult to finance these health endeavors.
  • A bad credit score can hurt your health by creating lots of stress.

You need to make protecting your credit score a priority. Don’t compromise your credit score for a new diet, because your health will suffer down the road too. You also need to be careful about spending lots of money on fad diets.

Your credit score is a rating which purports to show companies how responsible you have been when borrowing money in the past. While it is commonly understood that credit card companies, auto lenders or mortgage brokers will check your credit score before offering you a loan, that is not the only instance where your credit score can matter. There are a variety of less obvious reasons your credit score may be checked, and some of them just might surprise you.

Common Reasons Your Credit Score Is Checked

Your credit score is dictated by a variety of factors, including how many accounts you have open, your payment history with creditor accounts and the percentage of credit available to you which you have used. The better you rate in each factor the higher your overall score will go. Not all factors are weighted equally, however, with measures such as the number of open accounts you have mattering significantly less than your payment history, for example. Here are the top reasons your score is likely to be checked.

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Applying for Credit

Anytime you are trying to open a new line of credit you should expect to have your credit score run. Whether you are applying for a million dollar home mortgage or a $200 credit card, your lender will run your score and use it to determine your suitability for the amount you are requesting. The higher your score the safer you are to lenders, and the larger limits you are likely to be granted access to.

Renting a Home or Apartment

Although renting may not seem like a credit situation, you are being handed over access to a home worth more than your deposit amount, so many landlords will use a credit score to assess potential renters. While a low score can potentially deny your application, some landlords extend the importance of credit even more by offering decreased deposit options for higher scores.

Connecting to Utilities

Some utility companies will also check your credit to ensure you are making regular payments before they take you on. This is most notable in situations where you are opting to lease a piece of technological equipment, such as signing up for an internet company which includes a modem or router on a monthly basis.

Applying for Jobs

An employer is not allowed to run a credit check on you without your permission, however, some companies will request the opportunity and may hold it against you if you decline. Because some companies tie personal financial responsibility to at-the-office responsibility, raising your score may even help you to land a job which otherwise would have eluded you.

Enrolling in Insurance

One surprising area where a higher credit score can help you is when applying for auto insurance. Some insurers have found a correlation between high scores and fewer accidents, so if you can show a high credit score you may be entitled to a discount on your coverage.

The Basics of Repairing Your Credit Score

Credit recovery is usually a slow process, but that just means you should start as soon as possible, not that you shouldn’t even bother. Here are the basic keys to improving your credit score.

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Check for Errors

The good news is that it’s possible, even if it’s not probable, that your score may be artificially lowered by inaccurate information. Sometimes two people with the same name can have their credits report on the wrong account, and identity fraud can occur to anyone. If you have negative marks that you didn’t cause you can dispute them to see them removed.

Make Your Minimums

The biggest factor in getting a better score is showing that you will pay it back. That means you should do everything you can to make your monthly payments with every lender. As you develop a track record of this your scores will rise.

Lower Your Utilization

Having access to a lot of credit can be good for your score, but only if you aren’t using it all. The less of your credit you are using the better, so try to pay off debts and raise your limits to make the percentage drop.

Keep Your Oldest Accounts

It can be challenging to have a strong credit score if you don’t have a long credit history. If you have an old card and close the account you may accidentally damage your account by shortening your credit history. Instead, as long as it is not costing you fees, you are better off leaving it open but with a $0 balance.

Your credit score can impact your life in ways you don’t even notice, and if you aren’t careful you may just be causing long term harm without realizing it. The best way to make sure that you don’t have any unfortunate credit surprises when you really need it is to start fixing it immediately. You’ll be glad when the time comes to apply for a mortgage or your dream job and you have a sterling score to show off.