Ever been in debt and still feel like you need more money or need to acquire more assets? Well it happens. You may end up recovering from the bad report but other areas of your life may not. All this boils down to poor financial management and credit scores. This three digit number can either be your friend or be the worst foe you could ever imagine. Who are we kidding? Financial constraints face most of us. You might actually consider deferring payments to your credit card or a loan just to buy your kid a good birthday present or you might end up defaulting in payment all together.
[Read: When Life Goals May Mean a Lower Credit Score]
The consequence of poor credit is that you will end up paying your debts or loans one hundred or thousand fold. Want to figure out how much bad credit can cost you? Let’s keep going and find out.
Employees carry out background checks on people they want to employ or consider employing. Financial check is definitely going to be one of them, you bet on it! So, is there a financial secret you don’t want to talk about? For example a couple of hundreds or thousands of dollars you spent on a night out with friends? Whichever way you spent money, an employer might worry that you may not be viable for a certain job position because of your poor credit. He or she might argue that you may easily be put in a position to carry our corporate espionage among other evils for money.
Not only can this information be used to terminate your employment, it can be used to carry out a disciplinary action on you. Federal law allows for this kind of scrutiny in some states and for those that don’t may just decline your application without stating that the poor credit scores you have was the issue.
Bad credit can have a detrimental effect on your relationships. CNN gives report that 30% of the women and 20% of the men would not like to date someone with bad credit. If it is supposed to be a long term relationship, this may cause constrains if you are not well enough to pay the persons debts so who would? Most marriages hit the rocks the moment one spouse has poor credit scores. The couple becomes unhappier and may start arguing more frequently, going to bed mad at their spouses more frequently and may even lead to divorce or other kinds of infidelity.
Higher interest rates
The moment you are found to have poor credit scores you will be approved for finances. When you get approved for finances with your poor credit scores yet their goal is to earn, you will end up paying higher interest rates. This is by virtue of the fact that you pose a higher risk to not pay the loan with your bad credit.
For example mortgage interest rates are based on tour credit scores. So in-case your credit scores goes south, they consider this as a risk factor and you will end up getting a higher interest rate. According to the credit scoring company, FICO, a person with a lower credit score will have an interest rate that is twice as much as the one with a better credit score.
In the case of car insurance companies, they not only check your driving record to consider how much you pay for coverage, but also your credit report. In the case of bad credit it drives your premium higher.
Lacking government clearance
In the event that individuals working for the government as federal or military personnel may want to get a promotion or get to advance their careers, the occurrence of bad credit for either of them will deter this from happening.
The presence of bad debt in your life can cause you to end up with levels of stress being higher and this may take a toll on your physical and mental health. One may end up with headaches, muscle tension, sleepless nights and even maladies. Financial constraints can negatively affect your brain. To some people, stress levels being high can cause them to avoid eating. This in general affects their overall body as they get weight drops or end up binge eating leading to weight gain thus causing negative self-image.
It is already strain enough that you have a bad track record of paying up your credit in institutions. When you have a seriously tarnished repayment record, you end up losing the respect of your family members and friends. In the event that you need financial help next time, this may make it difficult for them to come to your rescue in-case of emergencies.
[Read: Ways to Fix Your Credit Score]
Luckily enough, it’s never too late to improve bad credit. You can log on to MoneySavingExpert.com to get your credit score and get money tips.