(Akiit.com) Debt is a lot more acceptable these days, and the vast majority of people owe money somewhere down the line, whether it’s a mortgage, car loan, or a simple credit card. And in most cases, being able to borrow can help us improve our lives.
However, once things start to slip a little in the financial stakes, debt can turn bad. And the result is that your credit rating will take a significant hit. Make no mistake about it, when this occurs, it can have a severe impact on your life, even after you pay off your debts. Here are five compelling reasons to avoid a bad credit rating under any circumstances.
It’s more expensive
The better your credit score, the cheaper it will be to borrow money.
Lenders and banks lend money based on risk, and if you have a poor credit score, it’s a sign that you have struggled with money or are just deemed a risky prospect. It means that when it comes to getting accepted for a loan or credit card of any kind, you will pay more in interest – it’s as simple as that.
You might not be able to borrow
As www.prettypenny.co.nz/bad-credit-loans/ point out, it can be tough to borrow anything when you have bad credit. Whether you have defaulted on old accounts or a Part XI debt agreement, that black mark against your name will mean it can be impossible to get any credit whatsoever. Even if you do find a lender – typically from a payday loan company – you can expect to pay significant interest and charges.
You will have less consumer choice
As a consumer with good credit, you can float around utility companies, phone providers and TV companies to your heart’s content. It means that every time your contract is up you can move to a better deal, keeping your cost of living down. However, when you are stuck with bad credit, many of these services will deny you access. You might have to pay a high-security deposit to utility companies, and you may struggle to switch your cell phone provider. In short, bad credit means you will have to accept a more expensive lifestyle.
You can struggle to get a job
According to http://www.stuff.co.nz/ more employers are credit referencing candidates than ever before these days. And that could be bad news if you have suffered from financial issues in the past few years. You can certainly count yourself out of a higher management job and work in the financial industry – or any other industry that involves security. However, it’s worth pointing out that employers will look at your credit report, rather than your score. Often, they will be seeking the reasons for your poor rating, rather than your financial situation.
You may not be able to find a home
Similarly, many landlords are checking credit references now. Before you get to sign a lease, most will see if you are a risk or not – and if you have a bad rating, there is nothing to stop them from renting out their property to you. Bad credit could result in you ending up on the street – the reality is that stark.
Staff Writer; Paul Moore