Credit facilities have made the world so much easier now. There are fewer things to worry about, and you’re never really in a financial situation a quick loan can’t fix. However, if you have bad credit, your access to loans will be significantly reduced. But then, did you know that bad credit can affect other parts of your life as well?
When most people think of credit scores, it never occurs to them that it can have an indirect effect on their housing, interest rates, and even stress levels. Let’s look at some of the other ways your credit score can affect your life besides loans.
The way a credit score works is that it lets lenders know how reliable you are as a borrower. When you pay all or most of your bills on time like you’re supposed to, it sends the signal that you’re in a good financial place, and are capable of meeting your financial obligations.
However, when you default, your credit score drops and lenders take that to mean you’re not able to pay your debts. The effect of this is that they accommodate your credit score by giving you higher interest rates. It also means that everything, from your credit card rates to even cash advances, will be subject to higher percentages.
As much as we might hate to admit it, the things happening around us have a significant effect on how we feel. If it rains on a day you planned to go to the beach, you’re going to be disappointed. If the power goes out while you’re watching your favorite TV show, you’re going to get upset.
Likewise, if you’re constantly told by banks and credit organizations that they can’t grant you the loans you’re looking for, you’re likely going to experience a lot of negative emotions. These rejections can deliver a serious blow to your self-esteem.
Housing and accommodation
Many landlords check credit scores before approving rental applications, and they do it for the same reasons banks and lenders do – to ensure you can pay rent. It’s much easier to get an apartment if you have a good credit score than it is if you have a bad one. Additionally, when you do get an apartment, you’ll probably have to pay a higher security deposit.
Stress and anxiety
With all the problems associated with a higher credit score, you’re going to have higher stress levels in general. Besides the factors we’ve already discussed, a low credit score can also affect your cell phone contract, the ease at which you get jobs, your insurance premiums, and even your car payments. All of these can compound to a lot of stress for you.
Fixing your credit score can mean more than just access to loans. It can also mean more favorable interest rates and better housing arrangements. It can even help you feel better about yourself. You can click here to find out more about how you can clear your debts and fix your credit scores.
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