May 8, 2018
Do you have bad credit, but don’t see much reason to try and fix it right now? It’s not uncommon for those with a ton of debt or financial problems to give up or never start the process of improving their credit. The thought of spending the next few months or years living on a tight budget to pay off what seems like an impossible amount of debt is overwhelming, to say the least. Sure, improving your credit history is going to take some hard work and time, however, it can be accomplished. When you consider the consequences of doing nothing, you suddenly find yourself inspired to do the right thing.
Bad Credit Limits Your Borrowing Options
Let’s start with the most obvious consequence to having bad credit – your inability to get a loan. Loans can be very convenient for affording things you want and getting you out of a bind. There are plenty of loans you could consider, however, if you have a poor financial record, you can forget about getting approved by most lenders.
Side note: If you’re really in a jam and your credit isn’t getting you very far, there is the option to apply for alternative payday loans for bad credit. Although not as much cash as you could get with a traditional loan or the attractive low-interest rates you see advertised, it does provide relief. If approved you could receive as much as $1250 in your checking account the next business day.
Thought that your bad credit would only impact you if you were interested in buying a home? Although it would be challenging to get a mortgage with a negative financial history, that’s not the only form of housing that could become unattainable to you. As more landlords look for reliable tenants, credit checks are fairly common. A tenant who has a history of not handling their finances is a red flag and could get your rental application rejected.
You Can’t Get a Car with Bad Credit
If you have bad credit in a town where public transportation isn’t readily available, you’re going to be in a world of trouble. Getting approved for a car loan is an uphill battle with poor credit. Which means you’ll need to find a car you can pay for upfront with the cash you have available in the bank. Since most people don’t have thousands of dollars stashed away for a new ride, chances are you’ll be catching an Uber or Lyft around town until you’ve saved enough to buy your own.
Forget That Job if Your Credit Sucks
Why in the world would an employer need to know your credit score in order to determine if you’re a good fit for the job? While in some industries, like finance, if you’re unable to handle your personal finances, you probably shouldn’t be responsible for handling anyone else’s. Other employers review credit reports to get a good idea of the type of person you are. Are you responsible and trustworthy? A bad credit history may tell a different story.
Expect Life to Get Pretty Expensive
If not being able to get a loan, housing, buy a car, or land that dream job wasn’t enough of a blow to your life, then this next one’s a doozy. Those with bad credit will pay a lot more on average on things you need. When you have a negative financial history, you’re required to pay deposits for utility or television services. If you are approved for a loan, you’re going to pay a lot more in interest. Products like car insurance will automatically skyrocket. The list goes on.
You may have thought that having bad credit was no big deal. Perhaps, at the moment it isn’t. However, if you plan on doing any of the above-mentioned things in the next 7 to 10 years, you may want to do something about it. That means figure out ways to improve your credit and start adopting more positive financial habits that will set you up for a better future. If you’re seriously having trouble with debt, talking with a debt counselor or financial advisor can guide you down the right path.