MENU
component-ddb-728x90-v1-01-desktop

How bad credit scores can hurt you

(KOMO file photo)

Surveys show that most Americans know a few key points about credit scores . They understand that a good credit score is important and a bad score can stop them from getting a credit card or qualifying for a loan.

After that, there’s a good deal of confusion and misinformation.

"What a lot of people don't know is that a bad credit score can hurt you in terms of your car insurance, your homeowners insurance,” said Liz Weston, a personal finance columnist with NerdWallet. “You could very well be paying more because you have bad credit, than if you had good credit."

Landlords check your credit and so do utilities and cellphone companies.

A lot of people mistakenly believe that keeping a small balance on their credit card from month to month will help improve their score.

"You do not have to carry a balance, you don't have to have debt to have good credit scores,” Weston said. "What you have to do is have credit accounts and use them – use them lightly but regularly. But there’s no reason to carry a balance. There's no reason to pay a dime of interest. I don't and I have terrific scores.”

One thing that will clobber you credit scores – making a late payment.

More Info: Many Americans Are Still Totally Confused About Credit Scores

Trending