You probably don’t think about your credit score all too often, but the truth is that it can have a massive effect on you and your financial health. It’s especially problematic if you have a bad credit score. There are solutions out there if you need cash quickly and you have bad credit, such as bad credit loans, but bad credit can still make it pretty difficult to get financial help when you need it.
The problem is that not many people are made aware of what the side effects are of bad credit, or even how you get bad credit in the first place. That’s why we’re here to help. Here are some of the side effects of bad credit that you should be aware of to encourage you to make some changes in the future with your spending.
Mainstream Lenders Won’t Go Near You
If you need to borrow money, you may have a hard time doing so if you have a poor credit score. There are a lot of big lenders that aren’t going to go near you if you have a poor credit score, especially the lenders that are more well known and trustworthy. Many traditional loans or things like credit cards simply won’t be an option for you.
You may be wondering why this is the case. Well, basically it comes down to trust. If you have a poor credit score, it usually happens for a number of reasons. For one, it may happen because you haven’t had enough activity to actually demonstrate that you are a trustworthy person to lend to, perhaps because you’ve never borrowed before.
On the flip side, perhaps you have borrowed a lot of money and you’ve simply failed to pay it back. You may have skipped a few of the payment deadlines and made late payments, and that doesn’t exactly scream trustworthiness to a lender. As such, the lender sees you as a huge risk to lend to, so they refuse to do it.
You can usually find bad credit loans, of course, but they can tend to come with very high APR and interest rates, making it even harder to pay them back in the long run.
On the subject of interest rates, they can also be affected by your credit score too. One of the benefits of traditional loans is that they can be quite competitive. You are almost certainly going to find a loan with a decent interest rate, so long as your credit score is good. When you have a bad credit score, your options are significantly more limited, meaning that your interest rates can skyrocket. This can make it incredibly difficult to pay the loan off in a timely manner since you are going to owe even more money as time goes on.
Renting May Be Difficult
Looking to move out of mom and dad’s and make it in the world alone? Well, you had better hope that your credit score is good, because it’s going to have a big effect on your ability to find a place. In a lot of cases, landlords will require that you have a minimum credit score of 620 in order to rent a property. Some of them are even stricter, requiring a higher credit score. You can find apartments to rent when you have a bad credit score, it just may be more challenging for you.
You Could Find Job Hunting Challenging
You may be surprised to hear this, but there are some jobs that will take your credit score into account before making a hiring decision. If you are looking for a job in upper management in a company or you are looking for something in the finances sector, there are some pretty tight criteria that you need to meet. Finding a job in these circumstances can be difficult when you have a bad credit score, since it will reflect badly on you and your decision making skills.
Your credit score can also spill into your personal life too, causing rifts with your relationships. You may not be aware of this, but your credit score may have an impact on your partner or spouse too. If you want to buy a house together or you want to get a new car, then a lender will look at the credit scores of both parties. This can end up affecting your ability to borrow, which can naturally cause some strain. It’s a lot of tension for your relationship that can even lead to further issues down the road.
Getting Good Deals Can Be Hard
Everyone likes to shop around to get the best deals on things like utilities, but shopping around is a lot harder when you have a bad credit score. Your utility companies may want to do a credit check, and this may raise your costs. Again, you may even be rejected for certain loans! This can be very expensive, and quite problematic in many circumstances.
Ultimately, improving your credit score is the way to go!