How Bad Credit Can Affect You
Thursday, June 18, 2015 at 3:15 AM
Like it or not, your credit score will follow you to your grave. A credit score represents your creditworthiness. The numerical judgment is based on an analysis of your credit files, and it's used by lenders and other organizations (insurance companies, landlords, government departments, etc.) to evaluate how risky it would be to loan you money. Whether you have excellent credit, poor credit, or no credit history whatsoever, it's important to know how bad credit can affect you. Today we're discussing the repercussions of having a bad credit score as well as tips for how to cope with your substandard number.
How Bad Credit Can Affect You
You may not be approved for a home loan.
If your credit score is low, you're perceived as a risk. It will be difficult to convince a mortgage lender that you are trustworthy and reliable, so you will likely struggle to obtain the loan needed to buy a house. Unfortunately, renting may not be a walk in the park either . . .
You may find it difficult to rent an apartment.
Did you know that landlords often check credit scores before approving an apartment application? They will assume that because your credit score is low, you can't be counted on to pay your rent. You will need to search for an apartment whose landlord doesn't require a credit check.
It may be impossible to get a cell phone contract.
Believe it or not, many cell phone companies check your credit score as well. Because they're offering you a useful service, they need to feel confident that you'll pay your bills. If you're struggling to get approved by a cell phone company, however, you could try purchasing a prepaid phone or a phone with a month-to-month contract. These options may be more expensive, but they will give you the phone you desire.
Starting your own business will be very tricky.
Unless you have the funds ready in your back pocket, you will have a very hard time starting a new business. Most new businesses require a loan from a bank, and your poor credit score will not convince the lender that you are responsible with money. Even if you have a spectacular idea and data to back it up, a lender will not want to work with you. Instead, you will need to find a way to raise the money on your own.
It may prevent you from obtaining a car loan.
Few lenders will be willing to give a car loan to someone with bad credit. Although it's not impossible, it will be challenging and it will undoubtedly come with a high interest rate and large down payment.
Luckily, there is an alternative. Instead of purchasing a new car with a loan, try leasing a high-quality car at a dealership that doesn't take credit into consideration. For example, you might want to check out Auto By Rent, the largest lease-to-own auto dealer in Missouri and Tennessee. We can help you secure a quality vehicle regardless of your credit history. To learn more about our services, please click here for a free quote or contact the location nearest to you:
North Springfield: 417-447-7979
South Springfield: 417-877-2001
We look forward to hearing from you!