The effects of bad credit are broader than you think and may surprise you! You probably know bad credit can cause you to be rejected for credit cards or keep you from getting the best loans rates. However, here are 5 other ways bad credit can impact your life.
- Utilities: Unless you move into a house or rent where utilities are paid for you’ll have to apply for these services. Utility companies ask for information like your Social Security number so they can check your credit history. Having bad credit can make getting these services more difficult. They may require you to put down a cash deposit or provide a letter of guarantee to be eligible for service. A letter of guarantee like having a loan cosignor that promises to pay your bill if you can’t.
- Cell Phones: Just like a utility company your cell phone provider might require a deposit to secure your services. You might be ineligible for special rates if you have poor credit. You could even limit yourself to pre-paid or pay-as-you-go phones models if you can’t cover the deposit or get a cosigner on the contract.
- Car Insurance: Applying for car insurance? Most consumers realize the negative affect bad credit has on car loans but even car insurance rates can be adversely affected because of poor credit. While not all states use credit information most of them do. The degree to which credit information plays in determining rates varies by company but it can still have a negative impact on your car insurance.
- Employment: While not all employers run credit checks on prospective employees some do and having poor credit can hurt your chances of getting hired. An employer must get your permission before asking for requesting your credit report. If you don’t want to provide it that is your right but that too could influence their decision to hire you.
- Business Ownership: As we know getting a car or home loan can be difficult with bad credit. So you can imagine how hard it would be to get a business loan with bad credit. Even with a great business plan and a terrific product or service you may hit a roadblock. If you do manage to secure a small business loan you may be required to put up collateral and pay a higher interest rate.
What to Do:
It is best to know your credit score up front and take proactive steps to manage your debt. Your credit report is a key part of many credit scoring systems so make sure it is accurate. Federal law gives you the right to get a free copy of your credit reports from each of the three national credit reporting companies once every 12 months.
If there are mistakes on your report get them fixed with the creditor and ask them to report their mistake to the major credit bureaus Equifax, Experian and TransUnion.
We hope you found “5 Ways Bad Credit Can Hurt You” helpful and thank you for visit.