The cost of having bad credit can be damaging in many ways. Your credit score shows an endless list of lenders and service providers how much of a ‘risk’ you pose to them financially when it comes to lending you money or providing you with a product or service.
In today’s economic climate there are no two ways about it; having bad credit will affect you and a low credit score can be damaging in many ways.
It could be a homeowner loan that you’re after, or perhaps a credit card or even a car on finance. A high credit rating will mean you have a better chance of being granted such products/services than you will with a lower rating and the cost of having bad credit is going to be costly to you.
Credit or loan applications rejected
A bad credit rating will mean that in the eyes of those granting loans or credit, you may no be ‘fit’ enough for them to take a risk with you financially.
Remember that most organisations are profit-driven and your credit rating is their way of determining whether or not you fit the bill for making them money.
A poor credit rating may see many applications for loans and credit rejected.
Higher interest rates and higher insurance premiums
A bad credit rating will mean that many lenders and creditors will charge you higher interest rates on their products or services.
Many insurance companies check your credit rating too.
Difficulty purchasing many products
In today’s world, a mobile phone contract is somewhat of a necessity to most. All mobile phone companies check your credit rating and a bad rating may mean that they don’t grant you their service which can hit you in the pocket when you‘re forced to pay more for a pay-as-you-go service.
A bad credit rating will mean that you may find it difficult to purchase a car on finance or end up paying a high interest rate if you do manage to buy one.
You may also find that organisations such as utility companies or telephone companies ask you to pay some kind of security deposit in order you to begin receiving their services.
Bad credit can impact your whole life
It’s not just your finances that will take the hit as a result of you having bad credit.
Landlords will check your credit when it comes to renting properties as this is their way of checking how reliable you are when it comes to them paying rent. Imagine being turned down for a perfect property because of bad credit!
Some jobs even require a good credit rating, too, such as those in the finance industry.