How a bad credit history can affect your credit score
A credit score is very much important for you as it is like a print of your credit history to your finance providers or lenders. This is the thing based on which the lenders decide whether you are eligible for lending. A number of people suffer from the problem of bad credit score and if you are one of them you may face a lot of problems
There are a number of reasons responsible behind a bad credit score and bad credit history is one of them. Before you start borrowing you must be aware of the fact if you any how fail to refund how bad it will affect your credit score. Let us have a look in detail to the fact.
1. Having a bad credit score the rate of interest on your loans and credits will become higher. This is because the credit and loan providers find lending you riskier than financing someone with a better credit score. Therefore, they will charge you a higher interest than that of a good credit scorer.
2. A bad credit history makes you ineligible for lending and lenders pay least attention to you regardless how needy you are. There is a high chance of repeated rejection of your request.
3. If you have a bad credit score and you are in search of a home then it might get difficult for you since there are a number of proprietors who check out credit score and every detail of the tenant. In that case he may not allow you get the tenancy.
4. A bad credit has great effect on your utility bills like telephone, electricity etc as well.
5. When your service providers check out your credit history, they ask for security deposits even if you have cleared all your utility bills on time.
6. Your credit scores affect your premiums for insurance as well. Whenever providing you some insurance the company will have a detailed look on your credit history. Having a bad credit history you will be charged higher premium.
7. In case of joint accounts, if any of the acquirers has bad credit score the other also suffers for it. Basically, if you are a bad credit scorer and run your own account it will not affect that much. But if you have a joint account with any of your family member in that case your poor credit history will affect your partner as well.
8. If you are supposed to start up a new business it will be tough for you to get bank loans if the banker finds you have a poor credit history. Even if your application of loan gets sanctioned you might not get the exact amount you need. Hence a bad credit history confines your borrowing.
9. You will face difficulty in getting a car loan as well. This is because when the bank finds your poor credit history either they deny your application for loan or charge a huge rate of interest. However there are banks that provide loan without checking credit history but their rate of interest is unbearable.
Thus it is very much necessary to maintain a good credit history so that your present credit score does not get hampered anyhow and you can call for loans whenever needed.
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Author: Sofiya Rosy
Learn more about the benefits of a personal loan and payroll debit card for your business.
