What Is Affected by Credit Scores?

Lenders use your credit score as a convenient and reliable way to determine how creditworthy you are. If your score is on the lower end of the 300 to 850 scale, you'll pay a lot more in interest, or you'll have a harder time getting credit than if it's higher, according to the Consumer Federation of America.

Credit Cards

According to a 2007 U.S. News & World Report article, boosting your credit score by just 30 points can save you more than $75 in finance charges alone on your credit card over the course of a year. You'll also be eligible for a higher credit line if you have a higher score.

Home

According to Experian, your credit score helps determine how much you'll pay monthly in interest, and how big your loan will be. Finance changes on your mortgage also depend on factors such as your income and home loan size, according to Experian. The nonprofit consumer organization, CFA, reports that a buyer with a credit score of 720 can earn a 5.5 percent interest rate, while a buyer with a 580 score will be subject to rates exceeding 8.5 percent. Over the life of a 30-year, $100,000 home loan, the buyer with the better score will spend nearly $75,000 less in interest.

Renting

You may not be ready for a home loan. You may want to rent. If your credit score is too low, your apartment application may be turned down, which may make it hard for you to find a place to live, according to the CFA. Lower credit scores may also cause you to pay bigger deposits for utilities, such as electricity and phone service.

Other

A poor credit score can also cost you more when you apply for a car loan. U.S. News & World Report again notes that boosting your score by 30 points can save you $20 monthly in interest charges on a three-year car loan. A low credit score can also cost you a job, as more employers look at these scores to judge an applicant's "level of personal responsibility." Different lenders have different standards, so it's hard to say what a "good" score is, but generally, if your score is under 600, don't expect the best interest rates.