Poor things bring only perils just like poor credit score, which you also call bad credit rating. To win the battle, it is necessary to know about the enemy. Similarly, if you want to get rid of the bad credit situation, it is essential to understand the dangerous effects it has.
Job loss
Oh, that is a huge thing. Employers always check your credit rating and those with the poor credit score, may lose the job. Perhaps, you do not need much detail on this point as you read news and there have been many such cases in the headlines. Irrespective of your profile in the company, the job loss may happen due to bad credit rating.
You may not be able to get a roof on rent
It can be a huge problem. Landlords are always reluctant towards the tenants that have a poor credit situation. A person who cannot pay his small bills and debts on time, how can he pay the rent on time? Even if you get home, the location will not be your preferred one.
Blurred approval chances on mortgage
It can be challenging to get approval on a mortgage with bad credit situation. The lenders are never happy with your credit score issues. After all, it is about a significant amount, and they need reasons to rely on your repayment capacity. However, with a good income, you can get approval, but still, poor credit always creates insecurities. You may need to do the struggle to find a specialised broker mortgage for bad credit; otherwise, conditions are complicated.
Financial products are expensive
Whether it is a credit card or car insurance, you always get costly deals. Due to the poor payment record, no finance company can trust you. They have only higher rates, and hefty monthly instalment plans to offer. It becomes difficult to take any decision about your personal finances, as, after a particular time, your credit score takes control of your life.
Pay deposit for utilities
If you want to open an account with a utility provider like the internet, gas connection, electricity etc. you have to deposit money. It is the security amount that the utility service providers take from the borrowers. The company wants to keep the money as security against the repayments in the future. A good credit person can take the same services without giving any security amount.
Conclusion
The above disadvantages of the bad credit situation can shake the foundation of your financial life. It is better to play safely in your finances and embrace self-discipline.
Molly Harris, the professional loan officer and author having more than a decade of experience in her career. She has the passion of solving the problem of those who are looking for the best mortgage while visiting Shinemortgages. She works hard while searching for the best loan solutions tailored to her clients’ financial goals. From first-time home buyers to seasoned investors, Molly’s expertise and dedication cannot match anyone. One can read her research-based blogs here and get the proper guidance. Molly Harris has possessed Master’s degree in Finance field and currently pursuing doctorate research on the UK mortgage.
