Bad credit can ruin you financially, no matter your age.

Your credit score, a three-digit number between 300 – 850, can make or break whether you get a new job, qualify for a loan, or get that 0% APR balance transfer credit card. Many of us assume after we’re established, own a home, and are mid-career, we no longer need to worry about our credit scores, but you do.

Here’s why.

Better Interest Rates

The higher your credit score is, the better the interest rates you get on any loan, whether a new credit card, car loan, or mortgage refinance.

Even if you don't carry a lot of debt, having a great credit score ensures you'll get the lowest-cost loan should you need to borrow money. 

For example, mortgage lenders base your interest rate on your credit score. If you want the advertised mortgage rates, you'll need great credit. The same is true of credit cards and personal and auto loans. Lenders also use your credit score to determine the fees they’ll charge. The worse your credit is, the more fees they charge, making it harder for you to borrow money.

Better Loan Terms

Like good credit gets you a low-interest rate, it also gives you better loan terms. Like interest rates, lenders base your term on your riskiness. For example, if you have a bad credit score, you may not get approved for a large credit card limit or won’t have access to the best mortgage loan programs, leaving you with less attractive terms.

Lenders use your credit score to determine the likelihood of you repaying your debt. A lower credit score means you may not repay the debt.

Other Companies Check Your Credit

It’s not just banks and lenders that check your credit. Anyone you do business with may check it; if you have a low credit score, they could deny your application.

This is common with landlords, utility companies, and insurance companies. For example, if you're shopping around for auto insurance to save money but have a low credit score, you may not get the best premiums because insurance companies use credit scores to measure your riskiness on the road.

Your New Job May be on the Line

Believe it or not, you may not get the new position you want if you have bad credit. Employers today use credit scores to determine an employee's likeliness to succeed. This is true in many industries, especially those dealing with money or high-level positions.

How to Improve Your Credit Score

If you don't have great credit, the good news is you can fix it. Credit scores change monthly, and with a few changes, you can improve your score, too.

• Make your payments on time – Your payment history makes up 35% of your credit score. Making your payments on time improves your credit the most. Any payments made over 30 days late can hurt your score.

• Keep credit card balances low – Your credit utilization rate measures the amount of outstanding credit to your credit card balance. Keeping your utilization rate at 30% or less impacts your credit score best.

• Don't close old accounts – The length of your credit history plays a role in your credit score. The longer you've had accounts open, the better it is for your score. If you have old credit card accounts, don't close them, even if you no longer use them.

• Keep a good credit mix – Show lenders you can handle various debts, including installment (e.g., auto loans) and revolving debt (e.g., credit cards). The greater the mix of credit, the better it is for your credit score.

• Limit credit inquiries – Each time someone checks your credit, it shows up as an inquiry on your credit report. This tells other lenders you’re in the market for new loans. Too many inquiries could make you look high-risk and lower your credit score. Only apply for new credit when absolutely necessary.

Final Thoughts

Your credit score matters at any age. You never know when you'll need a new loan, want to change jobs, or look for cheaper insurance.

Your credit score tells everyone how well you pay your debts and your level of financial responsibility. Keeping it as high as possible will give you the best results when managing your finances.