Credit scores and repayments often strike anxiety into us. The fear of making a late payment potentially causing issues for us further down the line can keep many people awake at night, but it’s important to remember that a poor credit rating is manageable if you’re dedicated to rectifying it. There are several ways in which these bad credit scores can impact our lives, and this can range from simple things like phone contracts to your ability to secure a mortgage offer.
Mortgage And Rent
When it comes to getting a mortgage, you’re essentially getting a huge loan from a provider. This is most likely going to be a bank or building society. There are other ways, including getting a private mortgage from a family member that has the ability to do so, but the chances are it’ll be one of the first two options. With a poor credit score, you’ll be causing that provider to think twice about trusting you for making your repayments on time or at all. You might be the most trustworthy person ever, but the only thing that lenders have to go on is your credit score, so making sure that it’s as high as possible is essential. The same thing goes with landlords too. If you’re signing a contract agreeing to pay monthly rent but also have a rich history of not paying rent on time, they’ll understandably want to choose another renter to live in their property.
Finance Plans
Getting other loans and arranging finance plans for expensive purchases can be just as difficult as arranging a mortgage too. For example, when trying to buy a car on a payment plan, you’ll be required to accept a credit check. If you have a bad score, then you might be ineligible for a particular payment plan or only be given access to higher interest rates, as the lender will see this as a higher risk for them. Luckily there are some that offer car finance for those even with poor credit scores. This service by Choose My Car, matches customers with lenders to help them secure finance when purchasing a used car. It also doesn’t impact your score either, meaning that you won’t experience the drop in score from a hard check.
Higher Insurance
For any type of insurance, from home to car, a provider generally doesn’t perform a hard credit check on your file if you’re selecting a yearly plan. Unfortunately, if you want a monthly payment plan, it might be a different story. Most people would prefer to pay for their insurance in cheaper, monthly instalments as with other things. But with a poor credit rating, an insurer might offer higher rates, as the monthly payments are more likely to be missed or late compared to yearly ones.
Everyday Essentials
Utility companies such as water and gas and internet providers may also refuse you for their services if your credit rating is very poor. These are arguably some of the most important things for us today, and being unable to get yourself a good internet connection could impact you in many ways, especially if you work from home. Find ways to boost your credit rating where possible so that you can avoid these rejections. A good credit score is far more important than a lot of people think, and a bad one can drastically impact your life.
