Lifes easier if you have good credit, financially speaking. It can be challenging to get to that point, but aiming for great credit is a worthwhile goal, considering how costly it can be to have bad credit.
You could have poor credit for a variety of reasons, and if you look at your credit score and credit reports, youll probably be able to figure out why. Perhaps you have trouble making loan payments on time, or your credit card balances add up to more than 30% of your limit poor credit could also be the result of having a very short credit history. No matter the reason, having bad credit means your history (or lack of history) makes you seem like a risky borrower to a potential lender.
If you have bad credit, youll want to work to improve it. Otherwise, you can face some obstacles.
Its Hard to Get Loans
The lower your credit score, the less likely you are to be approved for loans and credit cards. If youre approved, your poor credit standing often results in higher interest rates on the loan.
Credit reports and credit scores arent the only factors in loan-application decisions, but you want them to be an asset, not a liability. There are hundreds of credit scoring models out there, and youll never know which ones your potential lenders will use in their decision-making processes, so it helps to focus on the fundamentals (paying on time, using credit conservatively, etc.).
You Pay More
Having poor credit is costly. Yes, high interest rates will force you to pay more than someone with great credit who is borrowing the same amount of money, but non-credit industries also consult consumer reports and scores when pricing their products.
For example: When you set up your utilities or get renters or car insurance, your credit standing may play a role in determining how much you pay. If you dont meet certain credit standards of your electricity provider, you may have to pay a deposit when you have services turned on. Utility companies do this because statistically, people with poor credit are more likely to fall behind on or fail to pay bills. By asking for more money upfront, they protect themselves from loss.
Your landlord will probably pull your credit when you apply for an apartment, too, because he or she wants to know if youre likely to pay the rent on time. Again, you may be required to pay a higher deposit because of poor credit.
Potential employers can also pull your credit reports, though you have to give them permission to do so. Certain states restrict the use of credit reports in the hiring process, so check to see what your state allows.
Even if youre not planning on taking out loans, you should stay on top of your credit standing by regularly reviewing your credit reports and scores. Failing to check them means you may not find out about errors on your credit report until theyve adversely affected you, and its best to address mistakes before they cause bigger problems. Youre entitled to a free annual credit report from each of the major credit bureaus, and you can get two of your credit scores for free with a Credit.com account.
More from Credit.com
- Loans
- Financials Industry
- credit reports
- credit score
RESULT
I am often asked the question; What does bad credit cost me?" It is a hard question to answer because of the individual's circumstances and the fact that
What is the True Cost of Credit Repair? - EzineArticles
The true cost of bad credit will astound you. It is said that the "average" person with less-than-perfect credit will have, all other things equal, over $
The True Cost of a Poor Credit Score | The Fiscal Times
The True Cost of a Poor Credit Score; The True Cost of a Poor Credit Score. a a . Type Size: Small Post a Comment. The Fiscal
Credit Repair Services and The TRUE Cost of Bad Credit
Credit Repair Services and The TRUE Cost of Bad Credit Credit Repair is often looked down upon because of the costs associated with the process, but the true expense
True Cost Of A Bad Credit Score | My New Choice
Have you taken the time to investigate the true cost of having a bad credit score? Often times people believe that having a bad credit score will only result in less
The True Cost of Debt
The true cost of debt is in the opportunity cost - the things and. Money; Rebuild Bad Credit; Get a Credit Card With Bad Credit; 10 Ways to Get Out of
The Real Cost of Bad Credit - Utah Credit Consulting ...
Premier Credit Consulting. More than ever, your personal credit history has become one of the single most important factors relating to your financial security and
The Real Cost of Bad Credit - AAACreditGuide.net
Get the facts here on how bad credit can cost you literally hundreds of thousands of dollars over your life time. A must read!
Calculate Cost of Bad Credit | Lexington Law
Bad credit can cost thousands of dollars in high interest rates. Learn more about the costs here.
The true cost of a low credit score (Page 1 of 2)
It doesn't sound too bad if your low credit score means your mortgage rate went The true cost of a low credit score: which would cost him $1,275
