By Goldie Martin
There is nothing wrong with a person who has a bad credit score. It doesn't make them a bad person or someone you should not befriend. But it does mean they are going to have a harder time in life, because so much of what we do on a daily basis involves our financial trustworthiness. Below are some ways bad credit can impact your life.
Ever been in a situation where you had to take out a short term loan to cover a few expenses? It can happen to the best of us. Perhaps you have medical bills or some unexpected purchase you need to make.
The issue for people with low credit is they cannot apply for bank loans, and even getting a new credit card is difficult. But there are alternatives, such as online payday loans for bad credit found at the Personal Money Network website and other sources.
Payday loans can help you a lot when you have no other recourse, and you need the money as soon as possible. But you will not want to become reliant on a single source of quick cash, which is why it is better for you to have a higher credit score.
Did you know that most landlords, especially in big cities, will ask for a credit check when they are renting you an apartment? It has now become a common policy, as it is a way to narrow down the list of people who apply for vacancies.
Another issue is that even if you are planning on renting out a room from people who are paying the landlord, they may ask you for a credit report. Everyone wants to ensure they are renting out their apartment or a room within the apartment to someone reliable - and your credit score is an indicator of reliability.
Most people do not pay the full amount for a vehicle when they buy one. You will likely want to do the same. Unless you are getting a much older car for a few thousand dollars, you will want to borrow most of the value of the car and make a small down payment.
Entering into such an arrangement is not easy when you are someone who has a poor credit score. Most car loan providers will not want to offer you a loan. Even if some do, it will have a very high interest rate attached to it.
Dreaming about buying a house one day? It is not likely to be possible if you have a terrible credit score. Few to none mortgage companies are going to lend to you if they see that you have a bad credit history. They will get the impression that you are someone who cannot be trusted, and they would rather give a loan to someone with a higher credit score.
So if you are thinking about starting a family and moving into your own house in the future, you will want to pay attention to your credit score.
The good news is that you can go about improving your credit score. If you are young and do not have a credit score, you are in a great position. You can start by getting your first credit card, whether it is secured or unsecured.
Ensure you are spending money on that card each week, and then paying off the entire balance at the end of each month. This will ensure you never pay any interest, while it also allows the credit card company to make positive reports about you to credit agencies.
Those people who have a credit score, but a low one, will have to take extra measures. Not only do you need to use credit cards to improve your score, but you must also resolve issues on your existing credit report.
Perhaps you have some payments that you never made to institutions, and they are showing up as collections against you. It is important to call the relevant collections agency, ask if they can remove that data from your credit report, and then ask if they will agree to a payment to make that happen.
These are the many reasons why it's important to ensure that you have a good credit score that is in the 700s or 800s within a few years. By having such a score, you will have a lot more avenues open to you in life.
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