Your credit score serves as an indication of how well you pay your bills and manage debt.

Obviously, not everyone has a pristine credit score, even though having great credit should be a goal for all adults.

Sometimes, though, people don’t realize all the ways in which their credit rating affects them – personally, professionally and financially.

Here are 7 positive and negative ways your credit score affects your finances and your life:

1. Lower Interest Rates

When you have A-1 credit, it’s far better for you to qualify for the lowest possible interest rates on any kind of loan on credit offer. People with FICO scores in the 760 to 850 point range can get rock-bottom rates on mortgages, 0% auto financing deals and no-interest credit card offers or balance transfer deals.

Lower interest rates ultimately save you money in the long run because you’re able to put all of your repayments toward principle, not interest.

2. Cheaper Insurance Cost

A top-notch credit profile saves you money in other ways, too. Not only does a high credit score cut your interest costs, it can also help you nab cheaper insurance as well.

Some people don’t know it, but many auto insurance companies run your credit report when they’re figuring out your insurance rates. In fact, insurers tabulate something called an “insurance credit score.” The better your credit, the more affordable your monthly insurance will be.

Of course, the flip side of this is true as well: the lower your credit score, the more expensive your monthly insurance premiums will be.

3. Little or no utility deposits

If you’ve ever tried to get a cell phone or get a utility connection in an apartment or house, chances are the company you were dealing with pulled your credit report. If your credit was good to excellent you likely did not have to put down a “deposit” or some funds on account in order to get that phone service or utility connection.

But for those with poor credit ratings, it’s common to have to fork over lump sums of cash in these scenarios – mainly because you’re seen as a greater credit risk and the utility company wants to have some funds on account in case you don’t pay.

 

4. Getting hired

Most employers run a credit check in conjunction with a background check to gauge how responsible you are – at least in their minds. Right or wrong, more companies are doing this, so you need to know that having a strong credit rating could win you some points during the hiring process and make it that much easier to get that dream job.

Unfortunately, having poor credit can also cost you a position that you really want, and would otherwise qualify to have. So in a nutshell, when you’re on the job hunt, a healthy credit score can be one of your best assets.

5. Life after a credit catastrophe

Anyone who’s been through a major credit catastrophe knows that it can often be difficult and time-consuming to bounce back from those financial setbacks. It doesn’t have to take seven or 10 years to fully recovery from a foreclosure or bankruptcy, but lenders won’t necessarily be beating a path to offer you credit three months after those events either.

So if your credit has tanked for any reason – such as job loss or divorce – recognize that the impact on your financial life may be difficult to deal with in the short term, even though it can be overcome in the medium- and long-term.

6. The anti-dowry

It’s been said that debts like big student loans are now the “anti-dowry.” What people mean by this is that a lot of men don’t want to date women who are weighed down with huge college debt. Likewise, many women are increasingly avoiding men who have big debts and the bad credit that may accompany that. (The same phenomena can hold true for same-sex couples as well).

But my point is that serious-minded people who contemplate future goals – like buying a house, starting a business, having kids, etc. – often think twice before joining their lives with someone who appears to be financially unstable or fiscally irresponsible.

And in some people’s eyes, having shoddy credit is seen as a sign of fiscal mismanagement.

So don’t be surprised if you disclose to someone you’re seeing that you have a low credit score, and that person tells you that your credit mishaps are a dating deal-breaker.

7. Acceptance or rejection

 

It’s not just on the dating scene where your credit score plays a role in you being “accepted” or “rejected.”

Banks, auto dealers, retail stores and mortgage lenders all use your credit score as an important deciding factor for granting you a loan.

Even if you earn a very high income and are able to afford payments at this point in time, a few bad spots in your credit history could prevent you from getting the loan you deserve. And that rejection could prove especially painful to handle if you’re seeking a much-needed loan, like financing to launch or expand a small business.

Bad credit can also get you rejected from just having a place to live. Many landlords will pull your credit report before deciding whether or not to rent you an apartment. So having good credit is a must simply for putting a nice roof over your head.

In summary, even if you don’t like the many ways in which your credit impacts your finances and your life, recognize that over the course of your adult life you likely will need some credit history to do a variety of things: like get a credit card, qualify for a loan or just rent an apartment.

Your credit score is an indicator of your creditworthiness and ability to repay your financial obligations on time. Having a solid credit history can put you in a better position to get hired and take care of basic things like setting up a utilities account or financing a car. Whether it’s fair or not, your credit can even affect your love life.

So do everything in your power to keep your credit in good shape – and avoid the hassles that come from having bad credit.