The Side Effects of Bad Credit

How Bad Credit Can Affect You

When you apply for a bad credit loan, the side effects of that loan can be long-lasting and can haunt you for the rest of your life. A bad credit, such as a car title loan, loan can be impossible to keep up with and when you do not make your credit payments on a regular basis, it will definitely result in a bad credit. Bad credit is often brought about by the total amount of debt that you are carrying, as well as the timeliness of your payments.

Although it may not seem like a big deal at first, bad credit can make your life a living hell. For instance, it can make it difficult for you to get a job or even live in your dream home. If you are currently ignoring your bills and payments, it is critical that you sit down and organize your finances so that you can start figuring out your debt. Here is how bad credit can affect you:Loan approval

If you are planning on applying for a loan in the future either for your business or to handle an emergency, bad credit can make it difficult for you to secure a loan. The lower your credit score is, the less likely you are to secure approval for a new loan or credit application. Here is a breakdown of how credit rates work:

• 300 – 579: new or poor credit
• 580 – 620: OK credit
• 621 – 740: good credit
• 741+: excellent credit

Restrictive terms

If you do manage to secure a new loan or credit application, you should be prepared to deal with unfavorable interest rates, as well as restrictive terms on approved loans. The terms will vary from one lender to the next but most typically charge higher interest rates for low credit scores.
Renting nightmare

Bad credit can make it incredibly difficult for you to apply for an apartment lease. Most landlords run your credit unless it is expressly forbidden by the state, before they can determine whether you are a suitable tenant or not. Landlords tend to be wary of renters with low credit scores because they are likely to miss regular payments. If you are looking for a new apartment, therefore, you may not be able to live in your dream apartment because of your bad credit.

Securing a job

In some cases, bad credit can also make it impossible for you to get the job that you want. Some employers like to check the credit scores of prospective employees before they can officially join the team. If you are applying for a job in any financial institution, government agency or any position that will require a security clearance, you should be aware that bad credit can affect whether you will get the job or not.