Bad credit is no bueno, and you know that. But there are actually ways that bad credit is bad that you might not realize.
Today I’m sharing the Top 5 ways bad credit affects your life and how you can break the cycle.
Side effects of any kind aren’t fun. They often involve things like nausea and swelling, and mean you can’t drive or operate heavy machinery. Well, the side effects of bad credit might not keep you from operating a forklift, but they sure can give you a pretty bad headache.
The simple fact is that bad credit is something millions of people deal with on a daily basis. But it doesn’t have to be.
Chances are, you've already experienced some of these side effects if your credit is funky and needs work. And if you're repairing credit for others, it's really important to know exactly how much bad credit impacts someone's life. Understanding this helps you to be empathetic and helps explain the value of your services!
Why is credit important?
Well, bad credit can keep you from buying the things you want or need in your life. It can keep you from helping your family out or setting them up for success in the future.
While a good credit score gives you access to premium credit cards, better loan products and more favorable interest rates.
How can bad credit affect you?
If just the basics of having bad credit weren’t enough to give you a bad night’s sleep…
Here are the top 5 side effects of bad credit.
5. High interest rates or rejections
With bad credit, lenders see you as a risk, so you may be rejected or pay whole lot more for your loan.
Many banks have very strict standards for determining who qualifies for a loan, and having a bad credit score can seriously jeopardize your chance of securing a loan or even getting a credit card…or a car!
Even if you do secure a loan, you’re likely going to have to pay more in interest rates, which could cost you a lot of money over the life of the loan.
4. Your insurance premiums may go up.
Want to insure your home or auto? Well, you better get your credit score in order.
Most U.S. states allow credit-based insurance scoring which gives insurance companies the right to factor in your money habits when assessing your risk. So a bad credit score could prevent you from getting the lowest possible rate.
3. You may miss out on career opportunities.
In addition to credit-based insurance scoring, most states allow employers to pull credit reports when making hiring decisions.
Your employer may not see your exact credit score, but they can view things like outstanding balances, loans, late or missed payments, and any past foreclosures or bankruptcies.
It’s tough enough to get a job. Don’t give a prospective employer another reason not to hire you.
2. You’ll have a harder time renting an apartment.
According to Experian, to qualify for an apartment, you need a minimum credit score of 620.
You might find a more forgiving landlord who’s willing to overlook your bad credit, but they’re probably going to ask for a higher security deposit. And those properties might not be in the safest neighborhoods.
And the Number 1 side effect to bad credit is… strained relationships.
Money problems are hard – that’s why they call them “hardships.” It’s tough financially and it’s tough emotionally. You might feel embarrassed, guilty or worried. I know I did when a bank error messed up my credit. I felt like a loser and it was terrible! And when it gets tough on you, it gets tough on those around you. It leads to arguments and difficult discussions. In these times, it’s important to have a plan. That way you can reassure loved ones – and creditors – exactly what you plan to do moving forward.
So what can you do?
How can you break the bad credit cycle?
The main reason why people with bad credit scores don’t improve them is because they’re caught in a cycle. You can’t just snap your fingers and start over fresh.
But delinquencies can stay on your credit report for at least seven years. But seven years is not forever. And hey, that’s only 49 in dog years! In my case, my credit was a mess, and I was drowning in debt but I managed to break free. I learned how to solve my credit issues and I stopped using credit cards cold turkey and slowly, slowly dug myself out of debt. It was really hard at first, but it got easier and easier and my life completely changed.
The truth is, you CAN break free from the debt cycle. The first step is to “hit reset.”
This could involve working with a debt attorney or even filing for bankruptcy. Or even signing up for our free Start Repairing Credit Challenge to learn the secrets of repairing your credit.
Here’s my final point
With time, your credit score can go up if you practice good financial habits like curbing your spending, stopping use of credit cards and paying your bills on time. Checking your reports regularly and disputing any incorrect or outdated items is another way to help repair your credit and improve your score.
Most importantly, stay dedicated and persistent in your pursuit of credit health without all those nasty side effects. And definitely without any nausea!
I'LL END BY SAYING...
If you still need a Credit Repair Cloud account, check it out. It's the software that most Credit Repair businesses in America run on. Sign up here for a Free Trial!
And if you'd like to improve your credit score and learn how to earn extra income repairing credit for others, check out our brand-new Start Repairing Credit Challenge! Doors are closing soon, and it’s completely FREE, so sign up right now at startrepairingcredit.com and keep changing lives!
So take care, Credit Hero!
And Keep Changing Lives!