Do you know your credit score? The findings from a recent survey show about 40% of Americans don’t know it. Are you part of this statistic?
Knowing your credit score is important. It’s more than a number. Your credit score predicts how likely you’re to pay back a loan on time.
Lenders pay attention to your credit score. If you have poor credit, your chances of getting a loan are more difficult. You must know about the side effects of bad credit.
Read on to learn about the effects of poor credit.
Getting a Credit Card and Loan Approval Can Be Difficult
It can be hard for you to secure a loan if you have bad credit. The lower the score, the less likely you’re to find a lender who will approve you for a loan. Creditors are willing to accept a certain amount of risk.
Most lenders don’t make loans to subprime borrowers. Poor credit history is a major red flag for them. You can try applying for credit cards, but you’ll get a denial letter each time.
High-Interest Rates on Credit Cards and Loans
If you’re lucky enough to get approved for a credit card or a loan, you’ll likely have to pay high-interest rates. You’ll pay more interest over time than you would if you had better credit.
Unfavorable interest rates can make it harder for you to repay your loan. This isn’t good news if you take out a mortgage loan. A rate can add up thousands of dollars to the total cost of a mortgage.
Trouble Renting an Apartment
Can’t get approved for a mortgage loan due to bad credit? Trying to rent an apartment with bad credit can be just as hard.
A landlord will likely run your credit if you’re applying to lease an apartment. Red flags on your credit report can make a landlord wary. These include patterns of late payments and bankruptcies.
Landlords who rent to applicants who have a low credit score may ask them to pay a higher security deposit. You might find yourself with fewer renting options.
Trouble Getting a Job or Security Clearance
Some employers might choose to check the credit report of a potential employee. Certain jobs might require a credit check for security clearance purposes.
This is a common practice for management positions. Financial institutions tend to run credit checks. Companies want to know you can be trusted with money.
As you read, your credit matters. Want to know how people with bad credit repair credit scores? Click the link to get your credit repaired.
Poor Credit Can Affect You
A poor credit rating can have major effects on a person’s life. If you have poor credit, you might have trouble getting a loan. Bad credit can also affect your ability to rent an apartment or get a job.
Bad credit can’t follow you for the rest of your life. You can repair your credit score.
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