Bad credit is bad news. It might not mean anything to those who don’t know what it’s like to have bad credit, but anyone who does have bad credit will tell you that it really makes life difficult. Since the economy crashed in 2008, it’s become more common for people to suffer from bad credit. They lost their jobs, went into debt, lost their source of income and had to put their payments on hold, missed them, entirely, made them late, went bankrupt or even went through foreclosure. These things will kill your credit, and make it very difficult to obtain a loan. Bad credit is not like age; it’s not just a number. It’s the most important number in your life, and it matters desperately. Bad credit makes life very, very difficult.
You might not realize just how much a bad credit score can affect you, but we can tell you just how it will affect you the most.
No New Home for You
The American dream is to own a home. Unless you already own your own home or can afford to purchase one in cash, your bad credit is going to prevent you from applying for a new mortgage. Lenders are not willing to work with consumers who show a long history of not paying their bills on time or at all or running up their credit. Some lenders offer bad credit mortgages, but these come with interest rates so high you might not be able to afford even half the house you could afford with a traditional mortgage.
No New Car for You
We all like to drive a new car, but it’s not easy to do so when you have bad credit. Sure, you can apply for a bad credit loan, but these are usually reserved for those who have really bad credit and have no other option than to pay an exorbitant interest rate that’s out of this world. Additionally, many people cannot even qualify for one of these without a huge down payment, which makes it impossible for many people to even acquire a loan for a new car – even if it’s a used new car.
Difficulty Obtaining Insurance
Did you know that many of the world’s biggest insurance companies make you go through a credit check before they will insure you? You might not be able to get car insurance if you have bad credit, and it can cause you to have some serious issues with your driving – and you’ll always end up paying a lot more. Approximately 60% of an insurance company’s decision to offer you insurance is based on your credit.
Maybe you know that bad credit means no home loan and no car loan, but did you know it can mean paying higher prices on everyday items such as television or even your cell phone service? Service providers in almost any industry are permitted to charge bad credit customers a fee that’s referred to as risk-based pricing, and it’s a hefty fee.
Employment is Difficult
If you already work in finance or hope to do so, you’re going to find that it’s difficult to obtain a job in many instances. It is perfectly legal for potential employers to look up your credit score and run a credit check because they want to know if you’re trustworthy around their money. They are also perfectly capable of telling you that they’ve passed you over for the job because of your credit. It might sound like something a bit counterintuitive, and that’s because it is. It’s not easy to get out of debt and work on paying off your bills and improving your credit without a job, but with bad credit it’s impossible to be hired by many different employers in many different sectors.
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