Money is a little tight this month and there are more bills on the kitchen counter than there are dollars in the bank to honour them. Something has to give. This creditor won’t mind too much if this month’s payment is missed and caught up later, right? Wrong. The fact is many modern creditors rely heavily on invoices being paid when they are due to ensure a healthy cash flow to pay their own bills. They usually have systems in place that automatically flag a missed payment, and the end result is a bad credit rating that can often haunt the even temporary defaulter for years to come.
Buying A Car Can Be Difficult
Many people don’t even realise they have a bad credit rating until they try to make their next significant purchase – more often than not a new car. Many car yards won’t provide finance to a person with a bad rating or, if they do, they set the repayment interest rates so high that it can become almost impossible to repay. If you think the car yard’s loan terms are unreasonable, seek out a lender such as Dreamloans that offers Bad Credit Car Loans to get a better deal.
No Place To Live, Electricity Or Water
Did you know that many landlords or their real estate representatives check your credit history before offering you their place to rent? You might tick all the right boxes as a suitable tenant until the owner finds you skipped a payment somewhere. Trouble can also arise even if the landlord forgives your financial indiscretions. Often utility companies will increase the security deposits required for water, electricity, gas or cable for people with bad credit ratings.
Mobile Phones Cut Out
A bad credit rating can also cause you to loose cell or mobile phone reception – permanently. Sometimes phone companies will not offer 12 or 24 month plans and you might find yourself restricted to pre-paid or monthly contracts for the rest of your life.
Miss That Dream Job
While it seems unfair, some employees will not hire people with a bad credit history – especially if the job involves financial planning, budgeting or even simply handling money at a cash register. Rightly or wrongly, they figure that if you can’t handle your own finances why should they trust you with theirs?
Difficulty Starting Your Own Business
Sometimes people who can’t get a job decide to start their own business. The trouble is, this often requires financial support from a bank or other institution. If you have a bad credit history, the chances of a bank giving you cash to start your own venture are next to nil.
While having a bad credit rating is not the end of the world, and there are firms willing to help those who have found themselves under financial stress, it is best to avoid the hassles and try to keep payments up-to-date and maintain a healthy financial history.