To a lender, you’re basically a three-digit number. They rely heavily on your credit score, almost as if it is a magic 8 ball that tells them about your money and how reliable you are when it comes time to repay it. Unfortunately, a low credit score can cause problems in just about every aspect of your life.
Borrowing Power
Your credit score can range anywhere from 300 up to 850. A good credit score is considered anything above 700. If you fall slightly below that you can still acquire most types of loans, but you will have a higher interest rate. If your credit score is below 600, the chances of achieving an approval from a traditional bank become slim. However, you can acquire installment loans online for bad credit through other lenders. The amount you can borrow is generally up to just a few thousand.
Trouble Finding a Place to Live
Property owners who rent to strangers often place the leasing process in the hands of a trusted Realtor. One of the first things the agent does is pull a credit report. If your credit score is poor it can mean having to put down a higher security deposit or it may ruin your chances of acceptance altogether. The same applies to renting an apartment. The lower your score, the higher the risk perceived by the owners.
Utilities
If you are lucky enough to find a private homeowner who doesn’t do a credit check, you will still need to have utilities turned on and, with bad credit, the utility companies will want a large deposit to ensure they get paid. If you have gas, electric, and water, you can expect to need a thousand dollars or more.
Insurance
Once upon a time, you could walk into any insurance company and get insurance for a home or your vehicle without any questions asked. Today, unfortunately, that’s no longer the case. Most of the top-ranking companies do a credit check first before going further. If your score is below their accepted number, you won’t be able to get insurance with their company. And, even if you squeak by and they accept you, the insurance premium will be higher due to your lower credit score.
Added Fees
Unfortunately, if you have a poor credit score, you probably make payments late frequently. As a result, you end up paying late fees. And, if this is a regular practice, the credit card companies may even increase your interest rate. When you live paycheck to paycheck, you more than likely overdraw your account from time to time as well. This will cause you to receive an overdraft fee upwards of $30.00 or more per transaction.
Deny You Advancement
Poor credit is no longer limited to extra fees due to late payments or over-drafting your checking account. Today, many companies pull a credit report during the application process when you apply for a job. Fair or unfair, it’s becoming the norm and a bad credit score can prevent you from landing your dream job. It can also prevent you from going into business for yourself. If you are concerned about your credit score when it comes to borrowing money, take a look at the best place to get a loan with bad credit to learn what your options are.
Recovering Your Good Name
The good news is that your credit score doesn’t have to remain bad. There are ways to slowly bring the number up to a good standing. Start with establishing a budget, paying your bills on time, reducing your debt, and limiting your spending to the essentials.
In today’s world, your credit score matters more than ever before. Thankfully, you are in control of your destiny. Take the necessary steps to improve your score and get back to enjoying a comfortable lifestyle.
