When they land on your doorstep, do you hide bills away (unopened)? Have you forgotten your online banking password because you rarely check your account? Could you honestly say you stick to your spending budget every month?
Most of us dislike managing our finances, but for some of us, that descends into a bigger problem. Are you one of the millions of people who have bad credit?
If you’ve ever paid a bill late or had a “final demand”, you could have a couple of marks against your credit file. But does it matter? Could a poor credit history disrupt your life? Here, we’ll explore how it might impact you.
It Could Impact Your Career
Did you know that some employers check your credit history before offering you a permanent position? That is more likely to happen in industries where your financial history is relevant, such as finance or law.
Poor history will not necessarily stop an employer from offering you that dream job. Still, it can make them question whether you are the best candidate for the job (especially when you are against stiff competition).
It will indicate that you struggle to manage your finances properly. They might use that to infer that you’ll find parts of your job challenging.
You Might Not Get a Loan or Credit Card
Banks check your credit rating before they lend it to you. If you have a poor credit history, the bank will consider you a high-risk borrower. That means one of two outcomes.
You could get rejected for that loan application. The bank will offer you a loan with a far higher interest rate to counteract your risk of default.
In other words, your access to credit is far more expensive than for someone with an impeccable credit history.
Your Insurance Costs Will Go Up
Surprisingly, one of the consequences of bad credit history is that it impacts your insurance premiums. There is a link between poor credit and higher insurance claims.
Insurance companies factor this in when calculating your premiums. When applying for car or home insurance, you won’t get access to the cheapest options on the market.
If you have poor credit but need insurance, try a broker to help you get the cheapest possible deal.
It Could Stop You From Signing a Phone Contract
Are you dreaming of owning the latest iPhone? It might be time to check your credit rating and look at ways to fix your credit score yourself.
Phone companies charge monthly, so they want to know that you’ll be reliable when paying those phone bills. One of the negative effects of bad credit is that it could leave you without a contract, and you’ll have fewer phone options.
People Who Have Bad Credit: Next Steps
For people who have bad credit, the prospects appear daunting. However, you can repair your reputation whatever the causes of bad credit. Taking some simple steps to manage your finances is your best path forward.
For more financial help, head across to our finance section now.