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Wednesday
Mar132019

10 Ways Bad Credit Can Effect Your Life

1. EFFECTS RELATIONSHIPS

Whether it's asking family or friends, asking for money to pay an emergency bill can lead to problems. Being late on a credit card payment will damage your credit rating. But being late on a promise to pay back a friend can ruin a relationship. It also effects marriages and is the #1 reason for divorce.

 

2. LACK OF ACCESS TO EMERGENCY CASH

Does your car need an emergency repair? Or your pet has gotten sick? Having a bad credit rating means you may not be able to access the cash you need in emergencies via loans, etc. Some people fall into using payday loans, which is a huge mistake.

3. HIGHER CAR INSURANCE RATES

Even buying car insurance can be effected by bad credit. Some car insurers have decided that there's a connection between on-time payments and reckless driving. They will increase rates or deny auto coverage accordingly. 

 

4. A STRUGGLE TO REFINANCE A MORTGAGE

The new banking rules have been applied that make borrower's creditworthiness even more critical to negotiating a reasonable interest rate for home loans. The ability to get a loan for home improvement can help you to be able to fix up your house to sell it, etc.

5. DIFFICULTY RENTING

Even just trying to rent an apartment, if landlords see late payments, bankruptcy, etc, you may not be able to rent. Some even just look at the credit score and don't allow potential renters to explain their situation ie. job loss, medical bills, etc.

6. NEGATIVE JOB PROSPECTS

As unfair as it may be, you can be denied a job due to a poor credit score. Employers are supposed to inform you if your credit is the reason you were not hired, but this is no consolation to any job seeker who really wants and needs to work. 

7. HIGHER INTEREST RATES

Even if you are able to borrow money, borrowers who are considered to be higher risk pay higher interest rates. This is especially true with car loans, with interest rates as high as 20% and up.

8. LOSS OF BASIC UTILITIES

Utilities regularly check credit before beginning service. If you have been late making payments — especially utility payments in the past — you might be required to pay a deposit in order to get service.

9. LACK OF DISPOSABLE INCOME

When all your money goes to bills and debt, there is a lack of money for extras--eating out, nice clothing, travel, books and electronics. The list goes on and on.

10. POOR QUALITY OF LIFE

Debt can hold you back from getting an education, which leads to a better job and better quality of life. Not to mention the stress of dealing with a bad credit situation.

 Source: Wisebread.com