Sometimes when we are young we don’t really realize how we need to have good credit. We max out all the credit cards our parents give us. We get a cell phone before we can really afford it. At this young age we don’t realize that having bad credit can prevent us from getting a job or even a place to stay. This post will list some ways that having a bad credit score can affect your life.
The main way that having a bad credit score affects your life is you have higher interest rates on your credit cards and loans. Lenders see those with bad credit as riskier than those with good credit, so they hike up their interest rates. If you have a credit card with bad credit you can expect interest rates around 25% where someone with good credit can get them as low as 10%.
The interest rate you get on your credit card is the least of your worries if you have bad credit though. If you want to buy a car you will probably only qualify for a beat up used car at a high interest rate. If you’re dreaming of owning a home with bad credit, just keep on dreaming.
You can be denied a lease on an apartment if you have bad credit. Landlords will take a look at your application to see if they deem you worthy of living in their home. But just how do they know if you’re a trustworthy person who will be on time with the rent? By looking at your credit report of course.
If the landlord sees you don’t pay your cell phone on time, you’re late on your credit card payments and you’ve defaulted on your car loan before, then they most certainly won’t want to rent you their place.
One last way that having a bad credit score can affect your life is that you might get denied employment. It depends on the job you’re applying for though. If you’re applying to work at a fast food joint they probably won’t care either way. But when you work in the finance industry of course they require you to have excellent credit history. Other employers may also check your credit history along with your resume and work history to determine if you’re the right person for the job.
These are just a few ways how having a bad credit score affects your life. Be careful of your credit score and do what you have to do to make sure your payments are on time and you only borrow what you can afford to pay back.