The dream of most people is typically depicted or sketched as working very hard from the bottom up. It means having a stable job, making ample salary, purchasing a house or car, and having enough time for family life. However, this dream does not often become a reality, in spite of a strong home buyer demand and the low inventory of available, affordable starter homes. One may need to secure a home loan to buy the property they want. And to secure it, a strong credit score is required, which is something that most people don’t understand.
You may ask, “why should a low credit score worry you?.” Take note that your credit score is the chief deciding factor if you qualify for a loan or not, as well as what interest rate you need to pay for the loan. And a bad credit score doesn’t only impact your finances. It could affect your lifestyle and everyday life, too. Below are some ways a low credit score can negatively affect you.
Harm Personal Relationships
Little did you know, your overall credit profile and credit score can strain your personal life. It includes the relationships that are most important to you. Although your credit profile does not literally merge or combine with your partner after marriage, his or her credit can impact your capability to afford or be eligible for new loans.
Take home or car loans, for instance, that you are applying together. Keep in mind that lenders will look at or examine both your profiles and evaluate the overall credit risk of your household. Even if your credit risk is quite minimal to meet the qualification standards of the lender, you are likely to pay a larger deposit or higher interest rate together.
What’s worse, if your partner cannot be eligible for a new loan or credit card on his or her own, he or she may apply for a joint loan or credit card through commonly shared information between spouses, like Social Security number. Moreover, if your better half, in due course, defaults on payments, both your credits will bear the repercussions.
In these cases, acrimony and tension are very much common. Even worse, these situations can threaten the long-term viability of a relationship. With that said, it is important to repair your credit right away. Many credit repair experts can help you, like Credit Solvers.
Difficulty Securing A Cell Phone Contract
Your mobile phone is quite actually your main connection to the people around you. For some, their lives won’t be complete without a cell phone. It is just not feasible. The bad news is mobile phone carriers look very closely at the credit of their potential clients when deciding whether to agree to a new contract.
The reason behind this is similar to lessors’. For the most part, risky customers are less likely to have sufficient money or cash in their accounts or make timely payments. Moreover, even though you want a month-to-month plan, cell phone carriers are still likely to pay close attention to your credit because it’s simple to gain imprudent charges for things such as international calling, roaming, and high data usage in one month.
Even so, if you have a low credit score, know that there are other options to consider. Unfortunately, they could be inconvenient and costly. A few cell phone carriers take security deposits like in a secured credit card. If you don’t default on your payments, you can get the deposit back after two years.
Another option is a prepaid phone plan. However, they usually don’t come with nice phones and can have limitations on data and talk usage.
Although not all employers will literally assess your credit score before they hire you, and most of them will not turn down a candidate due to a bad credit score, take note that your credit can still influence how employers see you.
That said, if, for instance, they run a credit check on you and discover that you have had a poor history, and perceive you will be dealing with financial responsibilities, they might think you are underqualified. Thus, moving to other candidates. Well, fortunately, employers are not necessarily allowed or permitted to see your credit report.
The good news is that there are many ways in which you can improve your credit score. First, know why your credit is like that. Understand your weak points. Second, steer clear from new debts or credit. Instead, pay more attention to the loans you already have.