When you swipe your card yet again to buy a new pair of shoes or take out another loan, you probably don’t think about the future impact on your life. You’re probably a lot more interested in how you’ll look in those designer boots or watching your new plasma-screen television.
However, a negative credit score can impact your life, and your future, in numerous ways. Here is how a bad credit report can harm you.
1. Getting Approved for a Loan Will Be Difficult
Your present poor credit score will affect the likelihood of getting approved for a loan down the road. You may be asking yourself, “What is a low credit score?” Well, anything below a 600 will drastically decrease your chances of getting a loan.
2. You’ll Have Higher Interest Rates
If you actually do get approved for a loan, count that as a small victory. Your loan will probably come with high-interest rates and extremely restrictive terms due to your low credit.
3. Trouble Moving into a New Apartment
What’s bad credit and how will it affect your living situation in the future? Well, many landlords run a full background and credit report on all of their potential new tenants. If you’ve missed payments on your debt or have ever been evicted, you probably won’t get that dream loft you’ve been dying to live in.
4. You Won’t Be Able to Get Another Credit Card
If you’ve racked up the payments on your current credit card, it may be nearly impossible to be approved for a new one. However, there are some credit cards for low credit options available that could help increase your score.
5. Trouble Getting a New Cell Phone
If you want the latest new smartphone available on the market, sadly, you may have trouble securing a new cell phone contract. Cell phone carriers closely monitor a potential customer’s credit score to determine whether they should approve them for a new contract or not.
They want to ensure that you’ll be able to make your monthly payments in a timely manner. If you are living with bad credit, you may have trouble getting a new plan.
6. Strains on Relationships
Bad credit is a huge headache for the people who have it, as well as their loved ones. If you marry a partner with a low credit score, it could potentially negatively impact your own score and cause trouble getting auto or mortgage loans in the future.
7. Expensive Utility Deposits Due to a Negative Credit Score
If you sign up with a new utility company, including electric or gas, you’ll most likely have to complete a credit check. If you’re a high-risk customer, you may be required to pay a hefty deposit, sometimes up to $1,000.
It’s Not All Bad News
The good news is that even if you have a negative credit score, you can always improve your numbers. Stick to a budget, pay your bills on time, and do not take out another loan.
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