3 Things a Poor Credit Score Can Affect
A low credit score is something we’re taught is a bad thing. But there are some very serious ways in which a poor credit score can impact your life. Your credit score is a snapshot of how likely you are to pay your bills. Companies who give loans for large purchases like houses or cars want to do so with as little risk as possible. People with poor credit scores are high-risk borrowers and as such, these companies require more of a financial incentive to lend to them. Poor credit scores can wind up costing much more than late payment fees. The following are three things jeopardized by a low credit score.
A poor credit score can affect your mortgage, and you will wind up paying a higher APR than someone with good credit. Potential home buyers with low credit scores might not even be able to get a mortgage at all. But it’s not just home buyers who could be left out in the cold. Renters can suffer as well. Most landlords require a credit check, and a poor credit score indicates that you may have problems paying your bills. If accepted, you could face a larger deposit because of your score.
Insurance companies review your credit score when you apply, and a poor credit score can result in either denial of coverage or higher premiums to offset the potential risk. And for things like car insurance, which is legally required, someone with a low credit score is going to pay much more just for the privilege of driving.
Potential employers often run credit checks as part of the application process. A poor credit score indicates problems meeting financial commitments and, in their eyes, reflects your potential job performance And when you’re searching for a job, any potential problem can knock you out of the running.
A poor credit score can have a wide range of potential negative effects, so it’s best to keep an eye on that credit score and act quickly if you see problems start to arise. For more information, and to learn how The Credit Care Company can help you, please contact us.