How A Bad Credit Report Can Affect You
posted on Apr 8, 2022 | 74 likes
5 key damaging side effects of having bad credit
When you take out a loan or use your credit card to make a purchase, you probably don’t think of the experience as a test of your personal integrity or character. Granted, your immediate concern is on how you’ll feel behind the wheel of your new car, walking through your new home’s kitchen, or sitting in front of your new flat-screen TV.
Loan or credit card payments that are not paid off in time or in full can have a major impact on your credit score. A bad credit score can have more negative consequences than you may think.
So what's the big deal about having a Bad Credit Report? These days many institutions - from financial institutions, to businesses, to insurance companies - look to your credit history before making a move. If you happen to have a low credit score, this could lead to you not getting approved for a loan, losing out on a job or even an apartment.
Here are 5 key damaging side effects of having bad credit:
1. Loan Applications Might Not Be Approved
Financial institutions see borrowers with poor credit as high risk, which means they'll be less inclined to lend you the money you need. Whether you're looking for a quick loan to sort out personal expenses, a mortgage to buy a home, or a loan to finance a new car, you might find your loan applications being denied.
2. High Interest Rates On Loan Applications
If you do get approved for a loan, you'll most likely end up being stuck with a really high interest rate. Because of your poor credit score, you are viewed as high risk by lenders and therefore you would be made to pay a much higher interest rate.
3. Higher Insurance Premiums
These days, even insurance companies check background credit reports. The rationale is that poorer credit scores are associated with an increased number of claims filed. This prompts insurance providers to check a person's credit background. If they find that you have a credit score that's less-than-par, you'll most likely be charged a higher premium, no matter how many claims you've actually filed.
4. Difficulties Getting A Job
Many jobs - especially ones in upper management or in the financial industry - have specific criteria that potential employees need to meet, including having a good credit report. You might find it a lot more challenging to land the job you want because of your bad credit history, particularly if you have exorbitant debt amounts outstanding.
5. Starting Your Own Business Might Be a Challenge
Not only will finding a job be more difficult with a low credit score, but even starting your own business might be a challenge. Many new businesses need the assistance of a bank loan to get started. With a low credit score, banks will be less likely to approve your loan application, even if your business idea is a great one.
Now that you know how having a bad credit score can negatively impact your life, this is the time to ensure that your loan and credit card repayments are made as at when due. To find out when your next loan repayment is due as a Page Financials customer, click here to log in.
Remember, you can get a quick loan in Lagos from Page Financials in 24 hours. Click here to start now!