A lot of people are under the assumption that bad credit only really hurts them when they are about to apply for a mortgage in order to buy a house or apply for a loan to purchase a car. However, this is far from the truth. In order to ensure everyone is fully aware of the vast impact of a good credit score I am going to list a bunch of times when having bad credit can hurt you without you realizing it.

Car & Home Insurance

Car insurance companies, despite all of the controversy, continue to use your credit score as a risk indicator. The lower the credit score, the higher the risk, the higher the payment and vice versa.

A good score is typically above 760 and a bad score is below 600. Many people have no idea they are beneficiaries of insurance scoring. Insurers say more than 50% of policyholders have a lower premium because of good credit.

How many of you realized that by simply having bad credit you were increasing the cost to even own a car? Each insurer is different, of course, but the key is that good credit benefits you in many different aspects.

What to do: Whether or not you agree that credit score has an impact on your riskiness doesn’t matter. The insurance companies have statistics to back up what they are claiming. So your best bet is to  shop around as each companies good and bad threshold is slightly different.

Job Search

Many people don’t realize that along with a background check a lot of employers will run a credit check. The reasoning is simple… if you have really bad credit the chance that you will be distracted at work increases greatly. The government even considers it a security risk! Will the company have to deal with taking calls from collectors? Will they have to deal with the state and garnish your wages? Does the government need to worry about you selling confidential information to pay off your debt? Companies are also placing an emphasis on health for some of the same reasons in order to decrease tension and lack of concentration at work.

About 35% of the companies surveyed by the Society for Human Resource Management pulled the credit reports of current or potential employees last year, up from 19% in 1996. [Source]

Companies are starting to realize that this is not the best predictor of results but they still do it and its still a metric. Be aware that they  must get your consent to run a credit check and that they can not fault you for filing a bankruptcy. All other negative marks are fair game, though.

What to do: The number one rule here is that you should not lie about anything when you are job hunting. If you are caught in a lie via a background check or credit check, you will not get a job 99.9% of the time. You should also know what you are going into so check your free credit report @ Annualcreditreport.com before heading to the interview!

Utilities (Electricity, Water, Gas, Cable)

Have you ever been asked to pay a hefty charge as a deposit on utilities? This is often times relates to your credit score. Some companies will even change the rates based on what your credit score. If you live in one of the states that has community property laws, they will also check your spouses credit report at the same time!

What to do: Unfortunately, we do not always have the ability to choose a different provider. The best solution is to bite the bullet and get your utilities hooked up. Now start working on improving the credit score!

Cell phones

Cell phone companies rely on credit data heavily. The difference between someone with bad credit and good credit is a pay-as-you-go phone and a phone on a plan. More often than not the plans effective pricing is lower than a pay-as-you-go phone (overall cost per minute and text message). So to get the best pricing available your credit must be good! To get the cool new phone, also, you need to be on a plan. Since cell phone companies do a hard pull some people actually opt for pay-as-you-go phones, though.

What to do: Get a pre-paid cell phone or fore go service altogether.

Medical Procedures

Having good credit can get you on a monthly payment plan for an elective procedure. Having bad credit will force you to fork over the payment in full in order to get the procedure.

What to do: Depending on how bad your credit is, you may be able to apply for Care Credit or a similar option. Care Credit has the perk of working for Veterinary procedures, as well!

Apartment Rental

Many landlords, using the same reasoning as mortgage lenders, check a prospective tenants credit check before renting out the apartment. If you have bad credit, the landlord may choose to not rent you the property out of fear that you may go delinquent on the payments.

What to do: Check for landlords that do not check credit on craigslist and the classified section of the newspaper. Call landlords in your intended area and ask them what they do in order to qualify prospective tenants. Luckily, you will find some that do not do credit checks. Is it  possible to have a co-signer? If so, ask if the landlord will allow that. As a last ditch effort if you really need the place you could ask to pay more upfront by way of a security deposit or an extra months rent (make this a LAST DITCH effort, though!).

Now What? Start Repairing

With all of these facets of your life that can be affected by bad credit, isn’t it time you started working on fixing it? One step you can take in order to protect your identity is sign up with TrustedID and what better way to start than with a FREE 30 day trial? They offer a $1,000,000 liability protection in case something happens (read the terms, though!). I think signing up for the free 30 day trial is a GREAT idea to see if the service is something that would interest you. However, please do note that at the end of 30 days they will bill you a monthly fee. The fee depends on which kind of plan you choose and is typically around $10. So please please please make sure to cancel your trial before 30 days is up if you do not intend to become a paying member!

What are some other areas that I missed that bad credit affects (other than houses and cars)? What are your experiences with your workaround for each of the above problem spots for people with bad credit?