How Bad Credit Affects You
A credit score influences many aspects of your life. It may make your life more worth living as well as make it a hell. This is the reason why you need to be careful with the number of debts you are carrying. Too much debt translates to low credit scores thus a bad credit. It will definitely make your credit more expensive and limit your possibilities. You will have problems in securing a job, finding a lender, getting a place to live among many other effects.
Here are some of the common ways a bad credit affects your life;
Difficulty in getting approved for a Loan
Loan lenders take into consideration of many factors before making a decision whether to approve or deny your loan application. Their major concern is your credit score, the cost of the collateral and the ability to repay the loan. They will be able to assess the manner you handle your credit using the credit score.
It will also tell them whether you exceeded your loan repayment period. Therefore if you have a low score, then chances of securing a loan are very minimal if not zero. In addition to that, most of the lenders will not be willing to give the loan to subprime borrowers.
Most of the landlords do check for credit scores to determine late payments. Potential tenants with bad credits have low chances of making timely payments. Therefore if your creditworthiness is full of bankruptcies, delinquencies, and foreclosures, then chances of finding an apartment to rent may be a problem to you. Landlords won’t be willing to rent a space for you since the eviction process may cost them too much time and money.
There is also a tendency by landlords with exclusive modern apartments to hold tenants to higher credit scores. This is because the high demand of their well- kept apartments gives them the power to choose whom to rent. In simple words, a bad credit could make you live in an overcrowded, fraying place.
Grim security clearance and job prospects
Many employers evaluate credit reports as a job requirement to ensure you don’t become a risk to them. This is common in specific jobs especially in government institutions and financial industry. They will require you to have a noble credit history. If you have bad items in your reports such as huge debts or even unsettled bills, chances of you securing a job might be minimal. You will also have it rough in agencies which require a security clearance.
You can’t get a cell phone contract
It is quite difficult to live without a cell phone connection. It simply connects you and brings the whole world closer to you. Unfortunately, cell phone companies use your credit worthiness before they approve a new cell phone contract. The logic behind it is similar to those of landlords. They need to determine your reliability in making payments since they are extending services to you on monthly basis.
Customers with bad credit have fewer chances of making timely payments. In addition to that, they may have less money in their accounts. With a bad credit, the only option for you will be a prepaid cell phone which is quite expensive.