How a Bad Credit Score Can Negatively Affect You
Everyone knows how a bad credit score can lead to loan rejections (long term loans as well as short term loans) and higher interest rates. However, do you know that it can affect your personal and public life as well? It can, and that is the reason why it is important to maintain a good credit score. Following are some ways how a bad credit score can negatively impact your life.
A Bad Credit Score Can Cost You a Job
Demos, a US-based research organization whose focus include economic security and economic progress, conducted a survey among job applicants. They found that one out of every four applicants had their credit run by the potential employers. The survey also found that one in seven were denied a job because of poor credit. A number of companies, especially the financial institutions, nowadays check the credit report of prospective employees during the process of hiring. It is the take of many financial companies that a person who cannot manage his/her own finance would not be a suitable employee for them. Certain government jobs require a security clearance, which includes running a credit report. A bad credit report can lead the government agency to reject your job application.
You May Be Denied Housing if You Have a Bad Credit Score
It is against the law for landlords to run the credit of prospective tenants, however, many of them do it, especially the landlords of those neighborhoods where the demand for rental apartments/homes is high. If they find that you have a bad credit report, they will not rent their apartment/home for you. Landlords, in general, are of the opinion that a person with a bad credit report is less likely to make payments on time.
You Will Have To Pay Higher Insurance Premium with Bad Credit
85% of home insurers and 95% of auto insurers consider credit reports while deciding on the insurance premiums, according to NAIC (National Association of Insurance Commissioners). If your credit report is bad, then expect a higher insurance premium from your insurer. Again, it is the same reason, insurers also will take you for a person who does not make payments on time. Some auto insurers even consider people with a bad credit report as reckless, high-risk drivers, hence the need for a higher insurance premium.
A Bad Credit Score Can Keep You From Getting a Cell Phone Contract
Cell phone carriers look at credit reports before they approve new contracts. If your credit report is not ideal, they will not approve your contract. The reason is the same, a bad credit report will make them question your ability to make payments on time.
All of this can lead to potential strain in your personal relationships as well. So, if you have a good credit score, maintain it. If your credit score is not good, try to improve it as soon as possible.