In today’s life, handling finance is one of the most challenging tasks for anyone, whether it’s an individual or a business. Often, we are indulged in our life so much that we barely give any attention to the way we use our money. If you are one of those who just max out his/her credit card every month and ignore the bills and keep it aside, then there is a good chance that you might not have the clue how such financial bad habits can impact on your overall finance. As, if you had even a little bit idea about the outcome, you surely not would have taken such dire steps.
Careless attitude towards your money can cause you a big trouble in the future. Activities such as procrastination of bills, making late payments of previous debt, exhausting your cards, all these can affect your credit score drastically. So messing up in all these aspects can cause a great fall in your credit rating. Here, we have discussed 5 negative ways of how bad credit can impact your overall finance. So, let us go through them one by one.
Employment eligibility is affected
If you are a resident of the UK, then you should know that most of the companies do a credit check of the candidate before hiring them. Thus, if your credit score is bad, then the chances of your selection will be always low no matter how good your interview was or how skilled you are for the job post. Therefore, it is better to act before the situation gets worse and instead of letting your creditworthiness fall, you can apply for loans for very bad credit from direct lenders. Use the funds to pay all your pending bills and payments, and also ensure that you repay the debt on time.
Can be a barrier of your home buying dream
Every person dream of having his own home where he can live with his family and children happy. So, if you are thinking of applying for a mortgage, then be ready to expect a high-interest rate because of your poor credit rating. Having a good credit score makes you more worthy of getting debt in front of the lenders and also you will be offered the best possible deals. On the other hand, a low credit score means that you will be offered a high- interest loan.
Difficulties in finding a home for rent
Well, this might surprise you but the majority of the landlords and property dealers give approval to the person with a high credit score as it reflects his/her responsible attitude towards their finance. Also, you can do the negotiation with the landlord in lowering the price value that you have been offered for the property. This can save you a lot of money annually which you can probably spend on other valuable things in your life. Thus, it is better to take effective measures to increase your credit score. Start reducing your credit card use and if possible op for loans for bad credit with no guarantor from a reputed lender in the market. By making the payments of the debt on time, your credit score will witness a huge jump dramatically.
More payments to insurance
With bad credit score, you will have to pay more for your home, car, life, medical and other types of insurance where you will be charged high rates. Thus, the total amount of insurance premiums that you will have to pay every month or even annually will be generally more than the amount that a good credit score holder will have to pay.
A higher utility bills
With a lower score, all of your month-to-month service providers will charge you higher bills, be it for cell phone usage, gas, electricity, water or any other. Also, you might be asked to pay a certain amount of money in advance.
With all the points mentioned above, you must have well understood the impact of bad credit on your finance and what you need to do to improve it.