Your credit is one of the most important determining factors which directly contributes to your quality of life. So it makes sense that a bad credit score can wreak havoc and cause an undue burden on just about every consumer.
Here are 6 ways bad credit can affect your life:
1. Struggles Getting a Loan
If you have goals such as being a home owner, having your own car or paying for children’s college tuition, you will need money to do so and if you cannot afford to pay cash, you will need to apply for a loan. And in order to get approved for the loan, you will need to have a good credit score.
Unfortunately, most consumers with bad credit continue the downward spiral and never know the feeling of being a home owner or having a brand new car. This is why it is so important to stop the cycle of bad credit and improve your life by fixing your credit.
2. Increased Interest Rates
Consumers with good credit qualify for the top tier interest rates on everything from credit cards to mortgages to auto loans. If you have bad credit you will automatically have increased interest rates on these things which in turn elevate your monthly payments and end up costing you hundreds of thousands of dollars more than if you had good credit.
3. Difficulty in Renting
When it comes to renting, credit plays a crucial part in determining whether you will are approved for an apartment, as well as the size of the security deposit which will be required. Consumers with bad credit are often asked to put down 2-3 months worth of rent as a security deposit while those with good credit often times have their security deposits waived. This is why it is so important that you get your credit up to par before looking for an apartment.
4. Increased Utility Costs
Just like landlords, utility companies often times require a security deposit from consumers with bad credit. When considering that services such as telephone, gas, cable, internet, and electricity will all need deposits of $50 to $500 each to activate; the cost of bad credit quickly escalates.
5. Higher Insurance Premiums
Insurance agencies all differ from one another, but insurance underwriters determine your insurance premiums in pretty much the same way. No surprise here but your credit score is a very important part of that. An individual with a poor credit score can pay double the amount on car insurance as an individual with the exact same driver profile with excellent credit standing.
6. Difficulty finding a Job
When applying for a job, most employers will review an applicant’s credit reports prior to hiring them. It is believed that bad credit is a sign of irresponsibility and a lack of financial competency. Some even go so far as saying that applicants with bad credit are more likely to steal than those with good credit.
That’s why it is so important to put your best foot forward by making sure that your credit is at its’ absolute best so that you can maximize your earning potential and get the highest paying job that you can get.
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