Some people may realize that they have a bad credit score and think, "Big deal. I just won't try to get a loan any time soon." But damaged credit can affect a lot more than just your ability to get financing.
The quality of a person's credit profile can have a negative impact on several key areas of their life. Therefore, if you know that your credit is bad, there's no time like the present to start making improvements.
Situations Where it's Not Good to Have a Bad Credit Score
You may already know that a good credit score is your ticket to better interest rates on loans and lines of credit. However, did you also know that having good credit can save you tons of money and possibly even make it easier to advance in your career?
For better or for worse, your credit profile may matter a lot when it comes to the following:
Loans and Credit Cards
Again, most consumers know that having a bad credit score can make it more difficult to get approved for a loan or credit card. But even if you can get approved for these things, you'll probably receive a higher interest rate.
So, sure, you can simply pay cash for a car. But if you do, will that vehicle that you end up with be reliable? Will it last? Or, will it break down frequently and cause you to miss work and pay out a small fortune in repair bills?
On the other hand, having the ability to finance a car will expand your range of options. With an auto loan, you can purchase a new or recent model used car that should run well for years. It may cost more up front, but you'll most likely save money on maintenance and repairs down the road.
Also, while you may not want or need to buy a house right now, you never know when your feelings might change. And it would be frustrating to find out that your credit won't support a mortgage approval at the point when you decide to buy a home.
Renting an Apartment or House
Speaking of homes, a lot of people with bad credit just resign themselves to renting an apartment or house. But landlords often run credit checks on potential tenants. If they see that an applicant has a poor payment history, they may decide not to rent to them.
Eventually, someone with bad credit will probably get approved to rent a place to live. But it may not be their first, second, third or even fourth choice. They may also have to pay a steep security deposit before being allowed to move in.
Getting a Job or Promotion
Have you been turned down for jobs for which you know you're qualified? Your bad credit score might be the culprit. This is because would-be employers are, with your permission, allowed to look at your credit report if you apply for a position. Your boss may also check your credit if you put in for a promotion.
Right or wrong, some people see credit as a reflection of character. They may also think that applicants with bad credit are incapable of managing money and that their lives lack stability. Of course, there is a push to make it illegal for companies to deny employment to those with low credit scores. However, for now, this could still be an issue.
Car Insurance Rates
Not to sound like a popular commercial, but are you paying too much for car insurance? If so, then your credit might be to blame. Studies suggest that there is a connection between low credit scores and high insurance claims. So, drivers with bad credit are often charged higher rates than those with good credit for the same coverage.
In a few states, it is illegal to price insurance policies according to credit scores. But this isn't the case everywhere. Therefore, improving your credit may allow you get a lower premium.
How to Improve a Bad Credit Score
It should be clear that improving your bad credit can provide an easier way of life. And while credit can't be repaired overnight, there are actions you can take right now to start the process.
- Get current with your bills and make all future payments on time.
- Save up a cash deposit and apply for a secured credit card. Use this card to make small purchases and pay off the balance every month.
- Pay existing credit card balances down so that you're using no more than 30% of your spending limits.
- If you need a car, pay for your vehicle with a bad credit auto loan.
It will take some time, effort and patience to earn good credit. But rewards for your hard work may include better loan rates, your dream job and the ability to save lots of money.
Bad Credit Auto Loan Assistance
If you're ready to buy a new or used car, truck, van or SUV, Auto Credit Express is ready to help. Even if you have bad credit, we can match you with a local dealership that can work with unique credit situations. You can be back on the road and on your way to better credit before you know it.
Our service is free and comes with no obligations. So, go ahead and fill out our simple and secure auto loan request to get started today.