What’s wrong with having bad credit? Flickr
At some point in your life, you’ll encounter a credit score. This is a weird little number that determines how ‘creditworthy’ you are. It’s always advised that you have a good score, but why? To help make sense of the matter, here are some of the shocking ways a bad score can affect your life:
Prevent You From Getting A Credit Card
Having a credit card can help your family in many different situations. Personally, I find they’re extremely useful around Christmas or Birthdays when you need to buy lots of things at once, and it makes sense to stick it on your credit card. But, to get a card in the first place, you need to have a good credit score. Credit card vendors run a check on your credit rating during your application. If you don’t meet their standards, they might deny you the chance to own one of these useful financial tools. Naturally, you don’t necessarily need a credit card, but if your family will find one beneficial, then it pays to have a good credit score.
Stop You From Buying A House
Unless you’re extremely well off – and this could be the case if you’ve been smart with your money and invested it in different things – then you’ll probably need a loan to buy a house. Now, for small personal loans, no credit check is required at times. However, almost all mortgage loan suppliers will check your credit score before approving your application. Therefore, if you don’t have a good enough score, you won’t get the loan you need to buy your house. So, you’re stuck renting a property until you either fall into some good fortune, or you improve your credit score.As you can imagine, for someone with a growing family that wants to move out of their current home and buy a nice new one to own, this is a pretty big deal.
Block You From Purchasing Certain Things
Aside from stopping you from getting a mortgage to buy a house, a bad credit score can also prevent you from purchasing other things. Let’s say you want to get a new mobile phone contract or change energy suppliers. Both of these things require you to pay a company every month. As such, they want to ensure you’re a trustworthy person and don’t have a bad history of missing payments. What do they do? They check your credit score to see how it stacks up. If you have a really bad score, then they’re well within their rights to say sorry, we don’t accept you as a customer, you’re too much of a risk. You don’t have to be a financial expert to figure out that this is a big problem!
To sum up; a bad credit score stops you from doing a lot of important financial stuff. So, you should make it your mission to constantly check your score and ensure it remains good. I’ll leave you with some brief advice on how you can do this right now. Mainly, just make sure you always pay your bills on time and are careful with your money. It’s when you start missing bill payments that your score begins to suffer.