Disadvantages of Bad Credit

By
Mortgage and Lending with National Credit Fixers - Matt Listro

Nobody sets out to bring his or her credit score down, but sometimes things happen. You went through a rough patch, you forgot about some bills, the point is you made a mistake, and now your credit score reflects it. So what exactly are the consequences of having a bad credit score? Here are a few of the most important disadvantages.

 

Higher interest rates: A loan to someone with bad credit is riskier to a lender because he’s less likely to make future payments on time. If banks and credit card companies are going to accept you at all, you will have to pay more. They’ll charge you higher interest rates than they do those with good credit.

 

Trouble making big purchases: Before providing car loans, banks will check your credit. If you have a bad score, they might deny you. Car lots that advertise that they don’t check credit usually charge absurdly high interest rates on your monthly payments.

 

Security deposits for utilities: Any service that requires you make regular payments is interested in your credit. Companies that provide utilities like water, electricity, or cable might demand an upfront security deposit for customers with bad credit.

 

Denied cell phone contracts: Once again, companies need to be sure you’ll pay in time. If your cell service provider isn’t confident, they can deny you a plan. Prepaid, month-to-month plans are usually much more expensive.

 

Increased insurance premiums: Statistically, those with higher credit file more insurance claims. This relationship might not pertain to you—you might have never filed a claim in your life– but insurance companies still might charge you a higher premium.

 

Limited Employment Opportunities: Particularly in the finance industry, hirers care about the way you spend your own money. They may not hire you to management position if you have bad credit.

 

Difficulty starting small businesses: Starting your own business is always exciting and scary, but bad credit can limit your resources. You may have a great idea and a solid plan, but if your credit is bad, the bank may deny your loan application.

 

Denied Apartment Applications: Rent is most people’s largest expense, so landlords want to be sure their tenants can and will pay each month. If you have bad credit, they may not feel you’re worth the risk.

 

As you can see, the world puts a lot of stock in credit scores. If you’ve made a mistake, you probably want to know how to fix your credit. Give us a call today.

Posted by

Matt

Toll Free: 888-NCFIXER (623-4937)
Toll Free Fax: 888-FAX-4020 (329-4020)
Local: 860-282-6181
281 Hartford Turnpike Ste 500

Vernon CT 06066

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Rainer
145,203
Andrzej Niemyjski
Realty One Group - Sun City West, AZ

Besides removing incorrect info from credit report what else would you suggest clients with bad credit to get it repaired

Oct 06, 2015 03:19 AM #1
Rainmaker
3,210,970
John Pusa
Berkshire Hathaway Home Services Crest - Glendale, CA
Your All Time Realtor With Exceptional Service

Matt - This is very good information on the disadvantages of bad credit.

Oct 06, 2015 07:46 AM #2
Rainmaker
2,898,966
Myrl Jeffcoat
GreatWest Realty - Sacramento, CA
Greater Sacramento Real Estate Agent

There are a couple of things that can really cripple your advancement in life.  (1) Bad credit (as you say).  And, (2) Lack of education.

Paying your bills, and spending a couple of extra years in school can work wonders.

Oct 06, 2015 12:37 PM #3
Ambassador
2,660,529
Ed Silva
Mapleridge Realty, CT 203-206-0754 - Waterbury, CT
Central CT Real Estate Broker Serving all equally

So many people get blinded to the ramifications of a bad credit report swept up in the need for instant gratification.  It will cost them when they really want t buy something important, or even get that special high paying job

Oct 06, 2015 01:09 PM #4
Rainmaker
384,174
Matt Listro
National Credit Fixers - Matt Listro - Vernon, CT
Your Credit Repair Expert

HI Andrzej:  In addition to removing the bad credit - it is essential to make sure there is enough good credit reporting , and if there is not to get some good new credit established!

:)

Matt

Oct 09, 2015 04:32 AM #5
Rainmaker
526,485
Dave Halpern
Keller Williams Realty Louisville East (502) 664-7827 - Louisville, KY
Louisville Short Sale Expert

Many potential home buyers are 3 to 6 months away from repairing their credit and qualifying for a home. They need a good credit repair company, a patient mortgage broker, and a caring Realtor who will guide them through the process.

Sep 04, 2017 04:54 AM #6
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