Bad credit and low credit scores can affect your life in many ways.
Bad Credit can prevent you from getting a decent payment on a car loan, or qualifying for a mortgage, line of credit or credit card. We all know that. But we don’t usually think about the fact that poor credit can hurt relationships, restrict you from being able to move, or even find a job. Here are some things to think about.
Bad Credit Can Affect Relationships
If you can’t borrow money due to bad credit, you may consider asking a friend or family member to help. Being late on a credit card payment will damage your credit rating. But being late in paying back a friend can damage the relationship. Bad credit can also have a terrible impact on marriages. Financial troubles are the leading cause of divorce in America today.
One of the best uses of a credit line or credit card is to have it in the event of an emergency such as a medical issue. However, if you are “maxed out” on a credit line and have a low credit score you risk not being able to handle such an emergency.
If an emergency such as a natural disaster, or if an opportunity such as a job offer in another area comes your way, you may not be able to leave. In addition, having bad credit can keep you from getting a travel rewards card allowing you to save money using mileage points to purchase tickets and accommodations.
Automobile insurers in some states increase auto insurance rates partly based on credit score.
Although some states don’t allow credit scores to be a factor in determining home owners insurance rates, in the states that do allow it people with bad credit pay at least twice as much as those with good credit.
Renting a Home or Apartment
More and more landlords, including owners of one or two units, are checking credit reports of applicants. Credit score and lack of evictions directly correspond to how responsible someone is.
You can be denied a job due to a bad credit score. One out of four Americans have had to go through an employer credit check, and one out of 10 a job because of a low credit score.
Less than perfect credit can cost you $200,000 and up to $1 Million in higher interest payments over your lifetime.
You might be required to pay a deposit in order to get service if you have a bad credit score. It could be a significant deposit if you’ve been late on utility payments or defaulted in the past.
The Fair Credit Reporting Act allows government agencies that regulate professions to use credit reports. This means that states can require proof of creditworthiness before issuing everything from medical licenses to doctors, to construction licenses to contractors.
Quality of Life
Debt can keep you from getting an education. It can keep you in an unhealthy relationship. It can keep you from getting a better job. Debt can keep you from fulfilling your potential as a person.
What Should You Do?
There are ways to clean up a credit report potentially and even more to increase a credit score. Someone who has poor credit needs a game plan and a coach to educate and guide them. Give us a call and let the healing begin.
Also, visit https://eracreditservices.com/more-than-credit-repair/ to learn about the various services and tools we have available.