Negative Impact of Your Bad Credit Score
Ignoring bills and maxing out your credit cards can have the biggest impact on your credit score. Messing up with the amount of debt you have and your credit card payments can make your credit fall drastically. There are many businesses today that will judge you based on your current credit score. Thus, having a bad credit score is a big deal and can make it difficult for you to get financial assistance, jobs and a place to live. Some of the negative impact that your bad credit score can have are-
High Interest Rates Charged On Your Loans And Credit Cards
Your credit sore will indicate the probability whether you will default on your loans and credit card payments. Due to your low credit score you will be considered as a risky borrower compared to someone who has a better credit score. So, in order to moderate the risk creditors and lenders will charge you a high interest rate. Therefore, the complete loan is going to cost you more than what it would had cost if you had better credit and charged a better interest rate.
Your Loan And Credit Card Application May Get Declined
Not all creditors are willing to accept application from high risk borrowers. If your credit score is externally low then there is greater possibility that lenders and creditors may not want to lend to you. Due to your bad credit status your loan and credit card applications are likely to get declined.
Difficulty Getting Approved For An Apartment
You may not realize but your landlord will check your credit score as well before accepting your rental application. They may check your credit to find out if you had a previous eviction or any other rental-related blemish on your credit report. So, if you do not have a good credit score, it can be difficult for you to rent a house or an apartment. Even if you find landlord willing to rent you despite your bad credit score, you are likely to be charged a higher security deposit.
High Security Deposits On Utilities
It is true that almost all utility companies such as phone, electricity and cable will check your credit score as part of the application process. You will be charged with high security deposits in order to establish any services in your name if you have a bad credit score.
Unable To Get A Cell Phone Contract
Even the cell phone companies will check your credit score so that they can understand if they can rely on you to make regular payments. If you have a low credit score you may have to settle for a prepaid cell phone or a month-to-month contracts offered with an expensive phone or you may have to go completely without one at all.
You May Get Denied For Employment
Most of the companies today try to hire employee who has a good credit history. So, if there are any negative elements on your credit score, such as bankruptcy, high debt amount or outstanding bills, you can actually get turned down for a job. Employers are usually not interested on how responsible you are with your finances, they will only check for s things that could have an effect on your job performance.
Pay Higher Insurance Premiums
Your bad credit score will an impact on the insurance premiums you pay as well. Insurance companies will check your check credits and charge higher premium to those who have less than perfect credit rating.
Face Debt Collection
Your bad credit status does not itself lead to debt collection. But if you neglect your payments and bills for longer, then debt collectors are likely to pursue you.
In short, bad credit score will always have negative impact only in your life. You will find it difficult to get the funds to start your own business, purchase a new car, home and so on. So, understand the various impacts and try to make the necessary amendments so that you can get your bad credit status back on the right track.