You’ve been avoiding the scale. But, the time has come to rip off the bandage, open your eyes, and get real about your credit score. Why’s that three digit number so important? 

A lot is determined by your credit history and, in turn, your credit score. Whether you’ll be approved for a loan to buy that new car, whether you’ll be able to rent that apartment you’ve got your eye on, or whether you’ll be approved for a mortgage on your dream home, are all determined by your credit score. So, how’d that number get so much power? 

Credit report. Credit score. What’s the difference? Your credit report gives a detailed history of your credit past. It includes current credit information and balances, past credit interactions, overdue accounts, bankruptcies and previous credit inquiries. Your credit score is based on that history. It’s basically a score to indicate how likely you are to pay your debt in a timely manner. Credit scores range from 300 to 850, the higher the better. 

Why does it matter? We’ve already hit the basics: your credit score determines how likely you are to get approved for loans. That applies to credit cards, mortgages, car loans or any other types of loans. It also determines what rates you’ll be paying on these loans. The better your score, the better interest rates and terms you’ll receive.

 But, your score impacts so much more than that too. It can make or break you being approved to rent an apartment and can impact the amount of fees or security deposit you’ll owe. It can dictate the amount you’ll pay in premiums on home and car insurance and can even be a deciding factor for a new cell phone plan. It’s also worth noting, some employers make it a habit to check credit scores to get a sense of how responsible someone is. It’s scary just how much a number can impact your life.

Don’t ignore it. Get to know it. The worst thing you can do when it comes to your credit is ignore it. Checking your score is easier today than it ever has been. There are a number of online resources that allow you to download your credit report, plus a number of credit cards include your credit score as an added free service. The first step is to see where you stand. Don’t let the fact that you’re not applying for a mortgage right this second deter you from thinking about your credit score. You’ll have to face it sooner than you think.