5 Ways Bad Credit Can Hurt Your Overall Life
The negative impacts of bad credit can be far-reaching, especially if you live in the United States. Credit score is like the standard for everything money related.
When your rating is a mess, many other things can go south. This 3-digit number matters to a moneylender and many other financial institutions because it shows your economic status and how dependable you are in settling debts.
So what are some of the ways poor credit can take a toll on your life?
Reduces Your Borrowing Potential
Credit ratings fall in the 300 to 860 range. And a desirable score is any figure above 700. If your score dips below this mark, you can still secure some high-interest loans.
With anything less than 600, it is almost impossible to secure financing from a major bank. However, you can still obtain bad credit loans from alternative lenders even though they’re usually small loans with short repayment periods.
Difficulty Securing a Home
No homeowner wants to sell to a client with a bad history of clearing debts. Before any money changes hands, most homeowner will ask their Real Estate Agents to scrutinize your credit report. Needless to say, poor credit will be a clear red flag, and the agent may reject your offer or ask for a large down payment.
Likewise, landlords see people with poor scores as “high-risk” and would rather not onboard them as tenants.
An Obstacle in Your Career
It sounds unfair that some employers check credit reports when vetting candidates. But the practice is on, and bad credit could be the reason you fail to get a job in your dream career.
Moreover, it can also sabotage your dreams of starting your own company because you won’t qualify for funding.
High Insurance Premium
Unlike some years ago, these days, credit checks are a must-do procedure for insurance firms. If you fail to meet the required score, you may not receive your car or home insurance. Bad-credit borrowers who are lucky enough to get accepted pay more-than-usual insurance premiums.
Trouble Getting Home Utilities
Electricity, water, and gas service providers will ask you to pay a higher-than-usual down payment if they notice you have poor credit.
Remember, utility bills factor into credit score ratings. So if your credit score is low, service providers may need more proof that you’ll pay your bills.
You Can Improve Your Credit Score
It’s never too late to learn and turn; bad credit is not a permanent situation. Paying more attention to your finances and dropping some poor habits is an excellent way to start redeeming yourself.
You simply need to build and stick to a budget, pay bills on time, clear off your debt, and reduce your spending habits.
Don’t let poor credit ruin everything for you. Make sure you take practical steps to improve your credit score in case you’re below 600. If you have good credit, work smart to keep it up.
Author bio: Electronic payments expert Blair Thomas is the co-founder of high-risk payment processing company eMerchantBroker. He’s just as passionate helping businesses get merchant account bad credit, as he is with traveling and spending time with his dog Cooper.