By Ryan Greeley, Editor-In-Chief of BetterCreditBlog*
Whether you are rolling in cash or have thousands of extra dollars stored in your savings account, if you are not keeping a close eye on your credit it can be truly detrimental to your future finances.
Something as simple as missing a few credit card payments can affect you for years in the future, nevermind all the extra money that you are might waste on interest payments and late fees. With that being said, there are tons of different ways that bad credit can damage your future:
Bad Credit Reports
You probably already know that lenders share your credit report and information. Whether you are trying to get a loan to buy a new car, or you are looking to rent a home, both the lender and landlord will pull your credit report before making a decision. They both will receive the same credit report that usually dates back to the last 10 years or so. If you have missed payments and have a questionable history, this is going to hurt your chances of getting a loan for that car or renting your dream home.
Having To Pay Higher Interest Rates
Unfortunately, it is just not feasible for most individuals to buy a car or home with cash. This means that they have to go to a lender and get a loan for large purchases. When the bank fronts you the money to pay for the car or home, you are required to pay the bank back with interest. If your credit score in not in good shape, you are considered a risky investment and the bank will charge you higher interest rates. In the long term this also means that it will probably take you longer to pay off the loan, and the final cost will be much higher.
Bad credit can affect your chances to secure a loan altogether. Whether you are trying to get a business loan, a car loan, or a mortgage, there are a wide variety of lenders that won’t accept individuals that have a bad credit report. To the lenders this shows that you are unable to handle your finances responsibly. But with the aid of credit repair companies you can completely turn your credit around and get back on the right track.
Denied Employment And Housing Opportunities
You might even be surprised to learn that there are a lot of employers out there that look at your credit report before hiring you. In fact, some companies won’t even hire an individual with a bad credit report. The employer will be able to see the specific reasons for your bad credit rating and might assume that you will apply the same poor financial concepts to the job for which you are applying.
The same concept can apply for renting a home as well. Many landlords have the ability to pull credit histories before renting out a home. If they find out that the rating is bad they have the right by law to deny you the rental.
High Insurance Payments
Insurance is something that you can’t live without. You need life insurance, auto insurance, and even homeowners insurance. Did you know that around 90 to 95 percent of the insurance providers look at your credit history before issuing you a policy? With a bad credit score there is chance that you will end up paying higher premiums, or there is a chance that you might not even secure the policy at all.
This post is sponsored by BetterCreditBlog; image from PixaBay