Credit Info How Going Out Cost Me 40 Credit Score Points Read the Article Open Share Drawer Share this:Click to share on Twitter (Opens in new window)Click to share on Facebook (Opens in new window)Click to share on Tumblr (Opens in new window)Click to share on Pinterest (Opens in new window)Click to share on LinkedIn (Opens in new window) Written by Lindsey Delgado Modified Apr 21, 2021 4 min read Advertising Disclosure The views expressed on this blog are those of the bloggers, and not necessarily those of Intuit. Third-party blogger may have received compensation for their time and services. Click here to read full disclosure on third-party bloggers. This blog does not provide legal, financial, accounting or tax advice. The content on this blog is "as is" and carries no warranties. Intuit does not warrant or guarantee the accuracy, reliability, and completeness of the content on this blog. After 20 days, comments are closed on posts. Intuit may, but has no obligation to, monitor comments. Comments that include profanity or abusive language will not be posted. Click here to read full Terms of Service. Save more, spend smarter, and make your money go further Sign up for Free Can we all please talk for a moment about how expensive it is nowadays to enjoy a night out at a restaurant or bar. Even a quick run to Chipotle will cost a couple upwards of $20. Especially in pricey urban areas (like New York, San Francisco, or Atlanta) a simple night out each week can run upwards of $70, which quickly turns into $280 per month. And thanks to the advent of new fintech apps like Venmo and CashApp you can go out with your friends, NOT use your credit card, still spend more than you intended, and never really be able to track it or tie it back to your budget. Also factor in drinking and the relative ease of spending with an app and if you’re not careful – your finances and credit score could be in trouble. Debt Has Lasting Effects It’s crucial in your early-to-mid twenties to live within a budget. Why? Because your entry-level salary (likely) can’t keep up with the rate of spending. Suddenly you could find yourself in a hole, not even an annual bonus can dig you out of. Even going over budget just a little each month adds up over time. Say you’re putting $300 on the card each month (from just one night out with friends after a long work-week.) This is $3600 a year, or $14,400 over four years, and I’m not even factoring in interest! For me, it took me fourteen months of frugality to pay off nearly five years of bad financial behavior post-college: pizza takeout, shopping binges on the low days, and drinks every night after work. When it comes to your credit score, it isn’t just about how much money you owe, it’s about how much money you owe compared to how much overall credit you have. This is called credit utilization and if you are carrying close to the limit on your cards, this lowers your score. It’s important to check your score using a free online credit report so that you can see where your credit score stands. Using a credit score simulator, you can see this visually and it becomes more dramatic. For me, simulating the previously mentioned amount of $14,400 dropped my score to a 704. If I paid off all the balances, my score is a much better 742 (where it is currently now that I am debt free.) The Higher Cost of (Many) Nights Out 40 credit score points may not seem like much, especially if you have a higher score overall, but here’s how much a 40 point swing could cost you if you were shopping for a large, expensive purchase like a home. Lenders separate credit scores into ranges. Excellent credit = 720 and above Good credit = 660 to 719 Fair credit = 620 to 659 Poor/bad credit = 619 and below The better your credit score, the better interest rate you’ll get. If I’m shopping for a first home with a 742 credit score, lenders are more likely to offer me the most competitive interest rates, perhaps a 4.5% because my credit is “excellent.” If I’m shopping with just above a 700, this is still good, but they will likely offer me something higher, like the 4.9% range. Here’s where having lower credit can really sting. A $300,000 mortgage at 4.5% will cost $547,220 over the life of the loan. At the higher 4.9% interest rate, a $300,000 mortgage will cost $573,185. This difference of $25,965 may not seem like a lot when you’re making payments over 30 years, but imagine the financial difference having an extra $26k could mean. Is that your retirement nest egg? Funds for any future kids college? Try to think of the big financial picture instead of the monthly amounts. I’m not telling you to skip your lattes or your nights out, but be careful when spending in excess. Budgeting is never any fun, but when factoring in the damage to your credit score, your financial future just might depend on it. The views and opinions expressed in this content are those of the author and do not necessarily reflect the opinion or view of Intuit Inc, Mint or any affiliated organization. This blog post does not constitute, and should not be considered a substitute for legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation. Save more, spend smarter, and make your money go further Sign up for Free Previous Post WTFinance: What Are All These Student Loan Terms? Next Post #RealMoneyTalk: FinCon 2018 Written by Lindsey Delgado More from Lindsey Delgado Browse Related Articles Credit What Actually Hurts Your Credit Score? Beware of These … Credit Scores 101 Can You Have Good Credit and a Bad Credit Score? 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