Having a poor credit rating comes with a stigma that can get in the way of you achieving your goals and aspirations. It is a well-known fact that bad credit has numerous repercussions.
If your report shows that you have a bad credit history, it can get in your way; it makes lenders and service providers wary about doing business with you.
We believe that nobody sets out with the aim of being financially irresponsible.
Still, we also understand that life happens and you can suddenly find yourself in a tricky financial position with little to no warning.
Difficulty Purchasing a Home
Credit scores or ratings help lenders know how likely you are to repay your loans, that is why banks are less likely to give out loans to individuals they feel are risky.
Purchasing a home is a dream for most Australians, and a bad credit score can stop you from achieving this goal or at least make it tricky.
The lower your credit score, the higher the requirements for a mortgage.
Difficulty Renting an Apartment
When it comes to bad credit scores, landlords like to get a better understanding of how likely you are to pay them on time.
A poor credit score can hurt you on your quest to rent that perfect apartment as landlords usually require your credit report as part of the renting process.
The more beautiful the property and location, the more bad credit can affect you.
The next time you go in for a job interview, your potential employer can request permission to run a credit check on you; a lot of the time they do this without your consent.
This is not always the case, but for sensitive roles like finance, management positions, or general roles that involve handling money, your credit score will help a potential employer know how reliable you are.
Higher Interest Rates
Financial institutions almost always require people with bad credit scores to pay more; they do this by giving you a higher interest rate requiring you to pay more for the same products than people with better credit scores.
No matter what your goals are, capital is an essential aspect of achieving them. If you are not getting the response you desire, there are still many options at your disposal, such as bad credit loans.
Bad credit loans are a lifeline for those of us with unfavourable credit history; these are fair, and easy to repay loans that level the playing field.
Insurance is more Expensive
For some reason, insurance service providers equate having a better credit score with being more responsible.
They feel like individuals with bad credit scores are more likely to file claims as the credit rating of a person shows how likely they are to get into accidents.
There is no definite correlation between credit scores and being responsible, it is just another way to stigmatize lousy credit.
For institutions to be willing to grant people with bad credit a line of credit or provide a service, they might require a higher deposit payment than is necessary from customers with solid credit scores.
While signing up for utilities like natural gas, electricity and the likes your service provider might require a credit check, if you are found to be a high-risk customer, you may be required to pay a higher deposit.
After all, is said and done, poor credit rating can affect your life negatively in more ways than one.
Seeking professional advice from a financial expert is one of the first steps you can take in order to start improving your score.
Image Pexels License CCO