What Having Bad Credit Means for Your Finances

You might be wondering how having a low credit score can really hurt you; how one number can make or break your financial future. Here are just a few of the ways bad credit can bring you down: • You may not get your loans approved. If you’ve got a lower than average credit score, creditors and lenders see you as more of a risk to lend money to than your fairer credit counterparts. Since they feel you’re less likely to pay the loan back in a timely manner, they may not extend you any credit at all. • Say hello to your new, higher interest rates. Other creditors and lenders, specifically the ones behind your credit cards, see your bad credit and make you pay for it with raised interest rates – many times so ridiculously high, you end up paying off only the interest in your monthly payments, meaning you’re making no headway at all on the actual debt. • And higher premiums to go with it. Your insurance company is checking your credit rating too, and claiming that many of their higher claims are linked to lower scores. That means if you get in an accident and you have a low credit score, you can probably expect to pay a higher premium than normal. • Endless debt collector calls. If your bad credit is due to a bunch of overdue bills, you’re probably about ready to throw your phone across the room if you get any more calls from debt collectors. Want them to stop? Better start paying those bills, then. • Still want that nice new apartment? Too bad! If you’re on the hunt for an apartment with bad credit, chances are pretty high the landlord won’t approve your application for a lease until you get it cleared up. Even if you are approved, it won’t be at as good a rate as someone with better credit looking at the same apartment. • Auto loans won’t be easier to get either. Banks and lenders already see you as enough of a risk to deny you any new lines of credit, and if you’re in the market for a new car, you can kiss those dreams goodbye as well, until you can fix the problem. And what about all those “NO CREDIT? NO PROBLEM!” ads? Don’t worry, they’ll more than make up for it in interest rates. • You might not even be able to land a job. With the unemployment numbers as high as they are, and the job market not exactly looking brighter by the day, you really can’t afford to be turned down from a job because of your credit, but more and more employers are doing just that. Especially in the financial industry, having a good credit rating could be the key to landing your new job, and isn’t that reason enough to make sure your score is in top form?