| Bad Credit Problems |
| By Credit Federal |
Published
09/7/2008
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Credit Report
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Bad Credit Report Score Can Make Personal Finances Worse
You already know that a bad credit report score can result in credit card and loan rejection, but did you know there were other problems, too?
Here are example hardships you could face by having a bad credit score:
Difficulty getting an apartment, renting furniture and appliances, and even renting a storage unit. Many landlords and rental agencies now check consumer credit reports before renting their property and assets.
Inability to get utilities in your name without a deposit. Phone (including cell phone), electric and cable companies often require a credit check. If you have a bad credit history, be prepared to cough up a security deposit.
Loss of employment or promotion. In today's competitive market place, employers are looking for stable employees, and one sign of stability is meeting financial obligations. Also, certain jobs that require a higher degree of security; such as handling large sums of money or access to company secrets, may not be open to bad credit people. So even if you are already employed with that company, you may not qualify for promotion into those more sensitive job positions.
More costly insurance premiums. According to insurance risk analysis, lower credit scores are linked to higher claims filed. Hence if you have bad credit, you'll be considered a high risk even if you personally had never filed any insurance claim.
Relationship problems. A big cause of arguments and frustrations in marriages is due to money issues. Even if you're single, if you're in a serious relationship you may be asked about your credit rating.
Less rewards opportunities. Even if you don't want a credit card, you're still missing out on some great rewards opportunities like cashback discounts and airline miles that could actually help you save money.
Already got credit? For those who already have a credit card or a loan and feel that they'll never need another and hence are not worried if they trash their score, there's still bad news. If you already have credit, here's how a worse bad credit score can affect you:
Higher interest rates. As your credit turns sour; or worse, you become a high risk. Creditors will worry about you defaulting, and will likely raise your interest rates. Check the fine print to see if there is a clause which allows the creditor to raise interest rates should your score change for the worse.
Inability to upgrade. With a bad credit score, even if you already have; for example, a gold credit card, it's not likely you'll qualify to upgrade to a platinum credit card with rewards, nor a 0 intro balance transfer card.
Credit termination. It's also possible that your creditor won't renew; or will cancel, the line of credit you already have.
Ready to rebuild bad credit? Apply for a credit card to rebuild credit, learn how to get debt under control, and use our free budget software to track expenses and to manage checkbook register entries.
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