Because your credit score is not a number you deal with daily, it often goes ignored. Forgetting payments, maxing out a credit card, or ignoring your bills will all have a huge impact on your credit score and credit history. A positive credit record will lead to lower interest rates, more job opportunities, and more possibilities to rent or buy a home. Here are the most pressing side effects of bad credit:
The lower your credit score, the less likely you will be approved for a new line of credit. Since you are a high risk for the lender, you are either denied completely or offered the loan at a high rate.
2. High interest rates on credit cards and/ or loan
Because you are a high-risk borrower, some credit agencies will give you an incredibly high interest rate. It is not uncommon for some credit cards to have as much as 30% APR!
3. Not hired for job position
Many employers are checking potential employee’s credit report, especially in the financial industry. If you have less than ideal credit, this may be a reason for your employer to look elsewhere for an employee. CNN Money reports that 60% of employers use credit checks as part of the screening process for their new employees.
4. High insurance premium
All insurance companies check your credit before offering you a premium. It is statistically proven that consumers with lower credit scores file more insurance claims, therefore, it is said that these consumers deserve the most costly premiums (regardless of how many claims you actually filed).
5. Denied for an apartment or house rental
Landlords almost always check your credit before offering up a lease agreement. It is not uncommon for the consumers with the lowest credit scores to have much difficulty finding a place to live, if at all.
6. Difficulty buying a vehicle
Want that new Toyota? Make sure your credit is stable. Car dealerships use banks’ analysis of your credit report to determine a loan for you. Bad credit can leave you with extremely high interest rates consequent excess expenses on your vehicle.
7. Difficulty getting a cell phone contract
Cell phone companies always check credit since they offer their services in advance. Obviously the company needs to see how financially responsible you are with payments before giving you the cell service.
8. Difficulty starting your own business
In order to start a business, you usually need money in the form of a loan. If you are unable to take out a loan due to bad credit, your business plans might never come to fruition, no matter how good the business idea.
9. Calls from debt collectors
Many creditors will hire third-party debt collectors to collect the payment for past-due bills. They will call your home phone, your cell phone, and even go as far as calling your family members to track your whereabouts. These debt collectors will not leave you alone until your payment is made.
10. High security deposits for utility accounts
Your electricity, cable, phone, and natural gas companies might require you to put down an initial deposit down before your service begins to ensure payment. Companies frequently require this down payment as a part of the application process for consumers with bad credit.
Article Source: http://www.articlesbase.com/business-opportunities-articles/10-side-effects-of-extremely-bad-credit-4208260.html
About the Author
Extremely bad credit by Accurise accolades could only go so far. The economic storm that confronted everybody in late 2008 was a realization that everything was about to drastically change.