There are many reasons why people get bad credit. Others fail to pay their monthly dues on time; others deliberately skip making a payment while others chose to only pay for the minimum balance payment required. Some are unfortunate enough for becoming a victim of identity theft while others needed to file for bankruptcy. Even having no credit history meant a bad credit score.
These are some common reasons why people acquire a bad credit score. But how can bad credit harm your life?
Lenders make use of credit scores to gauge if you’re a risky borrower or not. Having a bad credit indicates you will likely default your credit obligation. If you plan on taking in jumbo loans in texas, car loan, or even credit cards, you can get charged for a higher interest rate.
Denied Loan And Credit Card Application
We already mentioned that bad credit could lead to higher interest rates. However, not all who applies for a credit card account or a loan will get approved during application. You will find it hard to qualify for a loan or credit card if you fail to improve your score.
Difficulty Finding A Good Apartment
Landlords now treat leases are credit. It is why many now do a credit check on individuals who plan on leasing their units. While you can get away with having bad credit, this could mean you’ll need to pay a higher security deposit to establish rent.
Companies are now stricter when it comes to hiring their people. It is especially true in the finance industry and those companies seeking individuals to take executive roles. They will check your credit report and take note of the negative items which can include high amounts of debt, outstanding bills, and bankruptcy. Companies nowadays deem people with good credit as responsible and trustworthy, which means bad credit can affect your ability to secure employment.
Difficulty Establishing Utilities
When applying for utilities to be under your name, utility companies will also do a credit check. It is now a common part of their application process. Much like renting an apartment, you may need to secure a higher security deposit to establish utility services under your name.
Higher Insurance Premiums
We know just how essential insurances are. The thing is, insurance companies also rely on credit checks during application. These companies argue that more often than not, people with bad credit scores often file more claims than those with good credit. It is the reason why they also charge a higher premium to bad credit holders compared to those with good credit scores.
These are just some reasons to boost your credit score. Bad credit can have a bad impact on your life. If you don’t want to jeopardize your chances of securing jumbo loans in texas, getting hired for your dream job and establishing the services you need for your daily life, then improving your credit score needs to a financial priority.