Back in the 1800s, merchants apparently got together to talk about people whom they felt were safe to give credit to according to Fox5. The same concept is behind your credit score rating today. So you should know that a three digit number is all it takes for creditors if they should loan you money at all. The list of creditors includes institutions offering loans such as banks and financing like auto dealerships. Credit card companies also look at your credit score rating.
Ideally, you’ll want to have a credit score of no less than 700. At this score, creditors feel more assured that you would be able to pay them back. However, it’s interesting to note that not many people take their credit score rating seriously. If you’re one of them, then you should reconsider it now. Why? Well, it’s because it can hurt you more than you think. In fact, it can affect your life in more ways than one.
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Consequences of a bad credit score rating
- You’ll have a harder time getting an apartment
Did you know a landlord can check your credit score before approving your apartment lease application? Well, landlords can do it provided it’s allowed by local laws where you live. If it is, then you could have a problem if your rating isn’t good. Landlords won’t be too keen to approve you for the following reasons:
- You have a history of making late payments
- You have a history of non-payments and foreclosures
- You’ve gone through bankruptcies before
If you’re guilty of any of these, then you could end up virtually homeless. You could end up living in an unpleasant neighborhood in a not-so-good property. Hence, it could very well feel like being homeless.
- You’ll have a harder time finding work
To be clear, employers don’t check your credit score per se. Rather they’re looking for any red flags in your credit history that could affect your ability to carry out your work. The following reasons could have an impact on your promotion to a managerial position especially if you’re an employee in the finance industry.
- Your credit history shows you have unpaid bills
- You’ve experienced bankruptcy before or currently going through legal proceedings for insolvency
- You owe a lot of money
According to thebalance.com, government agencies and jobs calling for a high-security clearance would also look into an applicant’s or employees credit report.
- You’ll have trouble getting in touch with people
Don’t worry. It doesn’t mean people won’t talk to you about having a bad credit score rating. However, they might have a hard time doing so if you can’t secure a cell phone contract because of it. If you do manage to secure one despite a poor credit rating, chances are you’d be paying more than you normally would otherwise. If this doesn’t suit you, then you have three options for your communication needs.
- You could opt to use a prepaid cellphone
- You could consider using a month-to-month cell phone plan
- You could forego using a cell phone altogether
Then again, can you imagine not having a cell phone in this day and age?
- Your relationships could suffer because of it
You wouldn’t want to have a fight with your wife or husband about your credit score rating. In particular, if you have a bad one. You should be aware of how it can affect major decisions in your life as a couple.
For example, the two of you decide to get an auto or home loan. The lender will look into both of your profiles to assess your capacity to pay them back. If your credit score rating is excellent yet your better half’s isn’t then it could put a strain on your relationship.
The situation can become even tenser when it involves the use of a credit card. Let’s say your better half isn’t qualified to get one because of a poor credit score rating. Guess what? He or she can still get a card by getting a joint credit card. However, this can affect your credit profile in the long run if your better half isn’t able to make payments.
A bad credit score rating can affect your finances as well as other aspects of your life. Indeed, it doesn’t only bear upon your ability to secure a loan for a home or car. A bad credit score rating can leave you practically homeless and maybe even unemployed. The worst part of it is that it could cause a major rift in your relationships.
Hence, it’s in your best interest to strive for a credit score of at least 700 to be able to enjoy and maintain your life. In doing so, you’ll have a healthy relationship and a stable living.