A credit score is an indicator of your reliability as a potential borrower based on your credit history.The timeliness of credit card payments and the absence of debt have the greatest impact on your credit score. Bad credit can add problems to your life and not only ruin your reputation, but also complicate the job search or real estateacquisition.
10 side-effects of bad credit
- High interest rates on loans and credit cards
Low credit score indicatesa possibility of problems withthe disbursement of loan. Lenders are afraid of such customers and make them pay for this risk by raising the interest rate.
- There may be a loandenial
Giving a loan is often a risk and lenders are ready to accept a certain amount of risk. But in the case when your credit score is very low, you may get a denial and your applications will be rejected.
- Security deposits on utilities
Utility companies often check your credit before providing a service (water, electricity, gas). In case of bad credit history, there is a possibility ofthe requirement of paying a security deposit to establish service in your name.
- Having a problem with cell phone contract
Most cellular companies check your credit when you apply for service. If you have a bad credit history, you may receive the denial ofservice. Then you will have to purchase a prepaid cell phone, which will be more expensive.
- The risk of employment denial
The senior management, civil service, or work in the field of economics and finance requires a good credit history. You may receive an employment denial if there are traces of debt, bankruptcy, or unpaid bills in your credit history.
- Difficulties with starting a new business
To start a business, you usually need to take a loan. A bad credit history can complicate the process of getting the required amount, despite a good business plan and business experience.
- Higher insurance premiums
Very often, insurance companies help determine the risk when issuing a loan. They take credit-based insurance scoreinto account to determine the rate that you will pay later, so the better your loan, the lower your rate, and the worse your loan, the higher your rate.
- Possible denial of rental housing
You may not know the fact that many landlords of your rented accommodation check your credit before renting you a flat or a house. And if your credit is too low, but a landlord still takes a chance and gives you housing, then it may be slightly overpriced.
- Pursuit, calls from debt collectors
Abad credit itself does not lead to pursuitof collectors. But it is quite likely that if in your history there is a trace of a bad, a failure credit, or late payments, then the collectors will follow you.
- Problems with buying a car
When issuing a loan to buy a car, banks always check the borrower’s credit history. If in the past you had problems with repaying a loan, then the bank may refuse you or give a loan with a high interest rate.
How to get a loan if you have a bad credit?
There are situations when a responsible person cannot timely repay a loan at the bank. If banks denyissuing a loan due to a bad credit, then contact loan companies. The loan amount will be small, but it may increase as you work with a loan company. If you repay your credit bills on time, a company will increase the amount of a subsequent loan.
What are the benefits of online loans?
The benefits of working with a loan company are obvious:
- You can borrow money there if youhave a bad credit history.
- They grant a credit online around the clock on a credit card.
- They offer loans with a low interest rate, which is set individually for each client.
- You can get a profitable loan online for the first credit with a bad history.
- They make a quick payment decision and instant money transfer to the card.
A bad credit history is not a problem if you work with a good loan company!