Bad credit not only keeps you from accessing loans but it can also leave you jobless. Bad credit loans are offered to people with low credit rating. Here are the common side-effects of bad credit.
1. Credit and loan applications may not be approved
Bad credit loans are not approved so fast because lenders know that your bad credit is a risk. If you have bad credit, your loans for bad credit will not be approved quickly by lenders. Bad credit financing is not as readily available as major loans.
2. High-interest rates on loans and credit cards
A money provider views an applicant with bad credit as a riskier person than the one with a better credit score. That means that the money provider will make you pay for this risk by charging you higher interest rates. Consequently, borrowers with a bad credit end up paying more in interest than those with better credit, and the cost becomes higher with major loans and credit card balances.
3. Difficulty getting approval for apartments
You must be thinking that this is absurd. Well, even landlords check credit before allowing tenants to sign a lease agreement. Therefore, if you have bad credit, you could be rendered homeless or close to it.
4. You can’t get cell phone contracts
Cell phone companies need to check on your credit especially when they oppose extending a month of service to you. They have to be sure that you are reliable enough. If you have bad credit, you will probably get a prepaid cell phone or a month-to-month agreement where phones are costly. People who lease or make payments on their cell phones pay more if they have bad credit.
5. Security deposits on utilities
Utility firms dealing with cables, electricity, and phones check on your credit during the application process. People with bad credit history must pay security deposits to get a service in their name, even if they always pay their bills on time. Mostly, the security deposit gets charged upfront before establishing services in the applicant’s name.
6. Higher insurance premiums
Insurance firms are also interested in your credit. They believe that lower credit scores have a direct relationship with higher claims filed. Consequently, they charge higher premiums to people with lower credit scores, regardless of the claims you have filed. Please visit We Loan Money for additional information.
7. You might be denied job opportunities
Jobs in the finance industry and those in upper management require the employee to have an excellent credit rating. You might be turned down for a job position because of negative items on your credit report especially outstanding bills, high debt amounts, and bankruptcy. Employers check your credit report rather than your credit score.
Bad credit financing is not cheap, but it is an easy and fast way of getting loans compared to other types of funding. However, it is important to have a good credit rating.