It’s no secret that poor financial money management leads to suffering the consequences of a bad credit history.
Maintaining a good credit score is important.
Although it seems average scores continue to rise each year, there are still plenty of people who struggle with a poor credit history.
And anything below 580 is bad.
As long as credit cards continue to max out and bills remain unpaid, credit scores continue to drop. And when they reach the ‘low’ level, it may be too late to take action.
Although credit can be repaired, it takes time to improve credit scores. Meanwhile, here are some of the repercussions that come with a poor credit history.
Consequences of a bad credit history
Difficulty getting approved for a mortgage
If you intend to become a homeowner but have a bad credit score, you need to postpone your plans for buying your dream-house.
While qualifying for a mortgage doesn’t require a perfect score, bad credit history could mean less-than-favorable loan terms, such as having to pay really high interest rates.
Trouble getting approved for a loan
Any application for a loan, no matter how small, will most likely be affected by your credit history.
Just like mortgages, you can either be denied the money or could very well get approved, but under the loaner’s harsh conditions!
If that car you wanted or other purchases you planned on could wait, walk away from high interest rates!
They might make it too difficult to pay off the loan, and you’ll just hurt your credit score even more!
Complications when applying for a credit card
While there are plenty of ways to get approved for a credit card with bad credit, a poor credit history could affect your top choices.
The odd thing is, credit cards could be a great help to repair credit history.
But having bad credit lowers your chances of getting approved!
Problems renting a home
Poor credit history can ‘deprive’ you of getting approved for a mortgage, but it can also affect the ability to rent an apartment!
Landlords now check credit history before presenting you with the lease.
It makes sense too, renting a property to tenants who clearly can’t handle their finances comes with risks.
Obstacles for finding a job
Credit scores affect your job search as well.
Debt and bankruptcy are huge red flags to potential employers.
Although credit history clearly can’t affect someone’s job performance, certain positions require creditworthiness, especially if you apply for a manager position.
Difficulty getting a cell phone contract
It actually sounds silly, seeing how everyone and their dog own a cellphone these days.
Unfortunately, cell phone carriers are reluctant to accepting you as a new client if you have a bad credit history.
High insurance premiums
Need to buy insurance for your car or home?
Well get ready to pay a higher insurance premium than you expected!
Companies won’t deny you the right to get insured, but they will take credit history into consideration.
Utility companies have the possibility to check your credit history as well.
And if yours qualifies is low, they could ask you to pay a deposit upfront, before they even start providing you with electricity or water, for instance.
No, I didn’t fall and hurt my head, relationships and credit history really do have something in common!
When my significant other and I met, we were both in financial trouble, but didn’t have that bad of a credit history.
However, certain relationships could really suffer if one of the partners doesn’t take personal finance seriously.
What other consequences of a bad credit history can you think of?
Did your credit score ever affect you in any way?
Latest posts by Adriana (see all)
- Hidden Expenses Homeowners Often Forget - January 13, 2022
- How Does Noble Gold Investments Help Diversify Your IRA? - October 19, 2021
- Who needs to buy life insurance? - October 1, 2021
- 3 uncomplicated ways to pay off mortgage faster - June 24, 2021
- Investing in college education: how to save for college - October 20, 2020