A low credit score impacts nearly every aspect of your life. If you want to rent property, you will likely pay higher security deposit; if you’re looking for a job, there’s a higher chance of getting rejected.
Even basic necessities like electricity and water will come at a higher price. Your credit history is assessed wherever you go.
If you think life can be a cruise even if you are rated low, think again. A bad credit score has serious side-effects on an individual’s life.
Here are 5 ways how your less-than-stellar credit history can make trouble for you:
Higher Interest Rates
If you are deemed a risk to a loan institution, your interest rates will naturally become higher than others’.
A bad credit score indicates to lenders that your creditworthiness is low and that lending you money will be risky. You will find yourself paying more interest over time than if you had a higher credit score.
It makes sense that certain industries require their employees to hold a good credit history—like the banking and finance industry. A low credit score may even make you lose out on a good job opportunity in other industries.
Your future employer is going to check certain items on your credit record that may impact your performance on the job—such as outstanding bills and bankruptcy.
Credit and Loan Application Rejections
One of the major pitfalls of receiving a low credit score from the credit bureau is that your future loan and credit applications will likely get rejected.
Security Deposits on Utilities
Utility companies verify that you have a decent credit score during their application process.
The downside is that even if you have been making timely payments, a bad credit score will cause you to make a security deposit to avail the utilities.
Basic utilities such as water, electricity, and gas may become a hassle to use.
According to a recent study, people with low credit score pay $21,000 more in mortgage than those with better scores. If you want to buy a house, boosting your credit score beforehand would be a good idea.
Even before a rental application is approved, your landlord is going to check your credit history. If it is questionable it’ll be very difficult for you to rent an apartment or house. Even if you are able to rent property, you will likely be paying a higher security deposit.
Don’t let a low score take over your life! Take back control of your financial future.
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