Day to day, there is Chexsystems, which is a whole ordeal. If you get on their naughty list, you will have trouble opening a bank account at all.
at my level of income, I am not really concerned, I have enough buffer that all my transactions can shake out no problem. At lower incomes, consumers are very sensitive to transactions settling too fast or too slow. A bill is due on the same day as payroll? Probably a 50% chance to collect either an overdraft fee or a late bill fee and you have no control over it. Get enough of those and your only resort will be fee-laden prepaid cards or cash-only.
Almost 2/3rds of Americans are 'paycheck to paycheck'. Do not scoff at this. Access to simple electronic payments needs to be equitable.
At least in the US, if you are unable to get a credit card due to having a bad credit score or no credit record at all, it certainly matters in that you miss out on rewards. Cash back of 1-5% is not nothing over a long enough time, and the folks paying with cash or debit are indirectly financing the rewards for the credit card users.
Per my understanding, these sort of rewards program dont really exist in other countries though.
It sounded like OP experienced the drop because they had to get new cards. But once they have new cards, the score doesntayter amymore. That's why I usually don't get the obsession over the credit scores.
There is almost no reason to be obsessed over credit scores themselves. However, if one is interested in obtaining credit in the future, they should maintain a good history of re-paying debts (such as student loans, auto loans, home loans, revolving credit card balances, etc).
Obviously, if you’re a lender and someone comes up to you and you know nothing about their history of repaying debts, you would ascribe them a higher risk than someone who does have a history of repaying debts.
There are a few other factors that could cause you to look riskier, so it also makes sense to not go out and get an auto loan and sign up for a few credit cards before applying for a home loan, since now that you just borrowed a bunch of money, you’re a higher risk, and hence will pay a higher interest rate.
at my level of income, I am not really concerned, I have enough buffer that all my transactions can shake out no problem. At lower incomes, consumers are very sensitive to transactions settling too fast or too slow. A bill is due on the same day as payroll? Probably a 50% chance to collect either an overdraft fee or a late bill fee and you have no control over it. Get enough of those and your only resort will be fee-laden prepaid cards or cash-only.
Almost 2/3rds of Americans are 'paycheck to paycheck'. Do not scoff at this. Access to simple electronic payments needs to be equitable.