Written by: Jon McDonald
Edited by: Austin Lang
Reviewed by: Ashley Fricker
Mental health advocacy and prioritization have taken a front seat in American culture. Bubble baths and deep breathing may come to mind as some of the top ways to relax and unwind, but unfortunately, they won’t soak away all mental health struggles consumers are facing.
In an economy riddled with high interest rates, inflation, and debt, many are struggling with financial implications that are taking a toll on their mental well-being.
We surveyed 500 individuals across the United States to uncover the correlation between low credit scores and mental well-being and how this connection might impact financial behaviors and goals.
The Affects Credit Scores Have on Mental Health
Respondents were first asked how their credit score impacted their mental health. Most participants in the survey identified as women between the ages of 36 and 45.
Our findings discovered a series of negative side effects that respondents with low credit scores have correlated with their mental health:
- 49% of respondents have experienced stress or anxiety caused by their low credit score.
- 46% admitted they avoid checking their credit score out of fear or worry.
- 44% of respondents revealed they are embarrassed to talk about their scores with others.
There is hope for improvement, though, as 62% of respondents believe that improving their credit score would boost their financial confidence and help alleviate mental health concerns. Despite the challenges they may be facing, 69% of those surveyed shared they are actively working toward improving their credit scores and financial wellness. This optimism serves as a bright takeaway from the research.
“The survey revealed both signs of optimism and worry based on the respondents’ feedback in our survey,” said Erica Sandberg, Consumer Finance Expert with BadCredit.org. “Nearly half of the individuals surveyed revealed they have experienced anxiety or stress due to having a low credit score, which illustrates the ongoing need to provide consumers with helpful resources to make better-informed decisions and strengthen their financial position.”
While more than half of respondents shared that they do not consider their credit score to be a stress factor in their mental health, there is still a large number of respondents whose low credit scores impact their mental well-being.
“It’s important for financial professionals to recognize this split and remain committed to providing educational resources, tools, and guidance on credit scores so consumers can acquire the knowledge to boost their confidence and get their financial and mental health back on track,” added Erica.
Financial Behaviors of Individuals with Low Credit Scores and Poor Mental Health
Our survey asked a series of questions to see whether respondents saw any correlation between their low credit scores and their financial decisions. Within this set of questions, survey participants reported that the top three financial goals they delayed or reconsidered because of a low credit score included:
- buying a home (17%)
- buying a car (15%)
- paying off debt (14%)
“Having a low credit score in today’s high-interest rate environment is a double-edged sword that can really bring down the consumer,” said Erica. “Consumers may not be able to control what happens with interest rates, but they can take this time to learn how they can improve their credit scores and take action to raise them so when rates do eventually come down, they can qualify for better terms.”
When asked which risky financial behaviors respondents engaged in most during a period of poor mental health, paying bills late (20%), compulsive shopping (14%), and online gambling (9%) ranked as the top answers.
Conclusion
Financial wellness and mental well-being are tied closer together than we think. Our findings discovered that 62% of respondents believe improving their credit scores would boost their confidence and mental health. This stat shows that a poor credit score has a direct impact on mental health, and the survey further revealed the negative side effects and financial issues that could unfold during periods of mental health problems.
At the end of the day, there is still room for consumers to explore and leverage additional resources to not only help them improve their credit scores but also their confidence, mental health, and financial journey. This remains especially critical as interest rates begin to cool and we see consumers jump back on the larger purchases they’ve held back, such as purchasing a home or car.
Methodology
In October 2024, we surveyed 500 individuals to find any correlations between mental health struggles and poor credit scores. The respondents ranged from ages 18 to 65+, with an average age range of 36 to 45. Participants were 54% women and 45% men. All survey participants were based in the United States.
