Your credit score is the most accurate measure of your attitude towards finances these days. Everyone from your loan lender to your landowner reviews your credit report before approving anything for you.
Maintaining and improving your credit score is not a difficult job and requires little more than a responsible attitude, granted that no tragedy or mishap occurs. But sometimes we do find ourselves in a position where are credit score brings us down every time we want to take a big step in our finances.
Other times we simply don’t pay enough heed to our credit score and just go about carelessly. So here is a list of difficulties you might have to face if your credit score is not good enough:
Difficulty in Getting Your Loan approved
One of the biggest drawbacks of having a sub-par credit score is getting your loan approved. With a low credit score, they might take longer to process your application or deny it easily. The higher the amount of loan you want is the more difficult the processing and approval might be if your score is very low.
Higher Interest on Debt Payments
Even if your loan gets approved, a low credit score subjects you to much higher interest rates than a good credit score does. This also holds true for credit card companies since they start viewing you as a higher-risk subject than people with good credit scores. So the more you borrow, the more you will ultimately be paying in interest to the company in question.
Hard to get an Apartment
Apartments for rent with bad credit scores are hard to come by as well. It may come as a surprise to some people but landlords also check your credit report before renting out an apartment to you. So you might find it difficult to land an apartment if your landlord realizes that you are not responsible with money.
Even if you do end up renting an apartment with your low credit score, you will probably have to pay a higher security deposit than people with better credit scores.
Refinancing Your Loan is not Easy
Refinancing your loan is something you should usually think about when you have a good credit score. But even with your low credit score if you do come across a good refinancing deal that does less damage to you than your current one, getting through to the people in authority will be much more difficult for you than for people with good credit scores.
Difficult to Land a Job
The good news is that not every job depends on your credit score, but most employers do check your credit report before hiring you. This holds especially true for jobs that require security clearance pr government and finance-related jobs.
Higher Premium on Insurance
Lastly, a major drawback people with low credit scores have to face is that they pay a much higher premium on insurance policies than people with good scores do. Your attitude towards finances is particularly important for insurance companies and they do not want to risk it with any client.