How can a credit score negatively and positively affect your life?
William Jenkins
Updated on January 29, 2026
Credit scores play a huge role in your financial life. They help lenders decide whether you’re a good risk. Your score can mean approval or denial of a loan. It can also factor into how much you’re charged in interest, which can make debt more or less expensive for you.
What happens if you have a negative credit history?
Bad Credit Means Trouble Getting a Loan A low score can make it harder to borrow, whether it’s a car loan, mortgage, or credit card account. And if you do qualify, you’ll likely have to pay higher interest rates to make up for your great level of default risk.
Why is it important to establish a positive credit history?
A positive credit history is about more than just being able to use a credit card to buy things. Your credit history will play a big role in whether your applications are approved. It will also determine how high your interest rates will be and whether you are asked to pay additional security deposits.
What are some of the impacts of having good credit?
Having a good credit score is important because your credit can impact many areas of your life. Good credit can make it easier to qualify for loans and credit cards, allowing you to finance large purchases with low interest rates or get a premium rewards credit card with benefits.
What are the three largest factors that impact your credit score?
Top 5 Credit Score Factors
- Payment history. Payment history is the most important ingredient in credit scoring, and even one missed payment can have a negative impact on your score.
- Amounts owed.
- Credit history length.
- Credit mix.
- New credit.
What number range is considered very poor credit?
Like FICO scores, VantageScores also generally use the range of 300 to 850. With the newer VantageScore models, a score of 601 to 660 is considered to be fair, while a score of 500 to 600 is poor. Scores between 300 and 499 are very poor.
How do I remove negative credit history?
1 To help on your way to better credit, here are some strategies to get negative credit report information removed from your credit report.
- Submit a Dispute to the Credit Bureau.
- Dispute With the Business That Reported to the Credit Bureau.
- Send a Pay for Delete Offer to Your Creditor.
- Make a Goodwill Request for Deletion.
What are 2 things you can do to establish positive credit history?
How to Build Credit
- Get a secured credit card.
- Get a credit-builder loan or a secured loan.
- Use a co-signer.
- Become an authorized user.
- Get credit for the bills you pay.
- Practice good credit habits.
- Check your credit scores and reports.
How does the length of your credit history affect your credit score?
Your credit report—the compilation of your credit history—must contain at least one account that has been active for at least six months for a credit score to be generated for you. Otherwise, there’s not enough information to generate your credit score. 1
What happens if you have a bad credit history?
Utility companies—electricity, phone, and cable—check your credit as part of the application process. If you have a bad credit history, you may have to pay a security deposit to establish service in your name, even if you’ve always paid your utility bills on time.
What can have a negative impact on your credit rating?
The listings that can have a negative impact on your credit rating include: Bankruptcy. Bankruptcy is when you are legally declared unable to repay your debts. Bankruptcy lasts for three years and the listing can remain on your credit file for five years or longer. Debt agreements.
What makes a person’s credit score go down?
The timeliness of your credit card payments and the amount of debt you’re carrying have the biggest impact on your credit score. Mess up in these areas and your credit score will plummet—and you’ll experience some negative side effects.
