Home Buddies - Houston Credit Repair Coach for Investors and Homeowners

How Bad Credit Affects Your Life

Often we hear many people say that they don’t need credit. Or we hear them say that they don’t see what the big deal is about credit scores.

There are certain things that you do, or don’t do with your credit, that can make some things in everyday life very difficult to achieve. Here are just a few examples of what credit and credit scores can affect in your life:

1. Getting approved for an apartment. Landlords (leasing agents) will check your credit before they will even allow you to sign a lease!
2. Paying a deposit for utilities. Electric, phone, and cable companies check your credit in the application process. You may be required to pay a security deposit to just to get service in your name if you have a bad credit score. They won’t care if you’ve always paid your utility bills on time in the past. If you show a low score, then they require a deposit.
3. Getting approved for a cell phone contract. Oh yes, they check your credit too, because they need to know if they can depend on you to make your payments, because they are extending a month of service to you when you initially sign up. If your credit is too bad, they may not accept you at all and you may be one of those who has to go get a prepaid cell phone or go without one at all.
4. Being accepted for a job. There are some jobs that will require for you to have a good credit score and history. Especially jobs in the finance industry. You can’t even become a bank teller if you have bad credit. Be aware that negative items on your report can get you turned down for employment. Negative items include high debt amounts, bankruptcy, and late payments.
5. Getting a low insurance rate. If you have a lower credit score, then the insurance companies see you as a potential risk for filing high claims. So they charge you a higher premium, regardless if you’ve actually filed any claims.
6. Buying a car. If your credit score is too bad, you could be denied a car loan altogether. If you are actually approved, you will be approved with a very high interest rate. A lot of the “no credit check/ bad credit” car lots are going to automatically charge an extremely high interest rate. Too high of an interest rate can make it really difficult for you to make your monthly car payment.
7. Applying for credit cards or a loan. Once again, if your credit score is too low or extremely bad, you can totally be denied because you are too high of a risk. Or if approved, you will get charged a very extremely high rate. With a higher interest rate, you end up paying more in interest than you would if you had a good credit score.
8. Trying to start a new business. Usually you need to apply for a loan to help fund the start up of your new business. A bad credit score and credit history will greatly affect the amount that you may be able to borrow, regardless if you have the best business idea.

It is so very important for all of us to be aware of our credit score and credit history. If you allow yourself to have bad credit, you may find yourself in difficult situations financially. Perhaps your credit has been affected by others. Such as some shared accounts with a spouse that had poor borrowing and payment habits. Please be sure that you are paying all of your bills on time, and not missing any payments. You can only go as far as your credit will take you in today’s world.

Good luck.

Barbara Partaka
Home Buddies