Your credit is one of the most important things that you will carry with you throughout your entire life. This is because credit will determine whether or not you will receive the necessary financing you will need for major purchases such as houses, cars or important loans.
If your credit score is good, you will be seen as a good candidate to get money loaned to. On the flip side, if your credit score is below average, you will be seen as a high-risk borrower and may be declined.
This is why it is very important to be wary of major life events that can have a drastic effect on your credit score, and how to circumvent the massive effect it can have. Here are five such life events that can see your credit score impacted directly.
Going To College
College is one of the best time in any young person’s life, as they study in the hopes of getting a degree that will sustain them financially for the rest of their life. However, the odds are pretty great that you will not have the cash on hand to pay for your degree out of pocket. This means you will have to take out loans from the government to get the necessary funding.
If you choose a path of education that does not pay well, it can directly affect your ability to pay back those loans. If you miss payments, you will see the results directly. That is why it is important to make wise decisions when you are pursuing high education, or you could be paying off loans for many years to come.
Changing Marital Status
Changing one’s marital status can also have a direct effect on your credit score. People often forget that not only is marriage a union of two people who love each other, but it is also a financial obligation. A change in marital status can directly impact credit scores directly.
If you get married, activity on joint accounts will affect the credit scores of both spouses, even though the credit scores themselves won’t blend. If you get divorced, the activity from either one will affect the activity of both. Therefore, removing your name from joint accounts post-divorce is highly important.
Having Children
Having children is a rewarding sensation, and will change one’s life forever. However, it will also change one’s finances because of the financial responsibility it takes to properly take care of a child. According to the United States Department of Agriculture, it will cost over $200,000 to take care of a child until their reach age seventeen.
Expenses with a child ill increase exponentially, and if you do not plan accordingly, this can lead you unable to pay off other debts you may have. The experts at White Mountain Partners have financial resources that can help you if you are in need of assistance in this regard.
Purchasing a Home
Buying a house will most certainly be the most expensive purchase you will make in your entire life. However, it is not just the cost of the house that you have to consider. It is also the expenses that come with purchasing a home, such as utilities, groceries and other bills you have to pay.
Your credit score can be greatly affected if you do not budget effectively and come up with the funds to pay both the monthly mortgage and all of your other responsibilities. Some start businesses to circumvent these costs and White Mountain Partners have valuable resources that may help you.
