Archive for Credit

The Multifaceted Aspects of Your Financial History: 7 Ways Bad Credit Can Affect the Quality of Your Life

Bad credit

Bad credit

In the beginning, one may believe that their credit score isn?t that important. As time goes on, however, it becomes apparent that their irresponsibility with their credit has some consequences. But before your credit gets to a point where it may take months to repair, it?s important to know the risks at hand if you aren?t mindful of your financial choices.

Here are seven consequences of having bad credit, and thus, why you should avoid letting your credit get out of hand:

  1. Decreases your chances of renting a home or apartment

While there are different reasons for having low credit, having a bad credit score can greatly affect your chances of getting approved for a rental home or apartment – and the reason for your bad credit in the eyes of lenders doesn?t matter. After all, your financial responsibility is primarily indicated by your credit score.

There are, however, homes and apartments you can rent from lenders that approve bad credit scores or don?t even check your credit at all. As expected, these are typically homes and apartments that have lower rental costs, and in turn, often have little property and/or are in dangerous, less luxurious areas of town.

  1. Makes it harder to get a job

While not all employers for every job will require that you have your credit score checked prior to getting hired, some employers, particularly for positions in finance or in upper management, will conduct a credit check before even considering hiring you. With bad credit, your flawless resume may not be looking too impressive anymore.

To an employer, a prospective employee having good credit tells them that they may be less likely to be involved in fraud or theft associated with the company. Unfortunately, until you raise your credit score, there?s likely nothing you can do or say to prove to a future employer that you are financially trustworthy.

  1. Causes more loan applications to be denied

It can be significantly more difficult to get approved for a loan when you have bad credit. However, it is still possible to get a loan if you have bad credit, but you probably won?t like the options you have at hand as it may mean having to borrow from risky lenders or only getting to borrow small amounts of cash at a time.

From, you can learn more about getting a loan before applying. That way, you can see if you meet the qualifications to obtain such a loan and if the loan would be a good match for you in general. Knowing if you qualify before submitting an application is important as the more you submit, the lower your credit will get as credit checks affect your score.

  1. Results in utility companies charging you security deposits for services

Utility companies will also check your credit. This includes phone, electricity, gas, water, cable, Internet, and other basic utilities your home may have. If you have a bad credit score, these companies may charge you security deposits upfront before you can even receive service, regardless of whether or not you?ve paid past utility bills on time.

The worst part of having to pay security deposits for having utility services run in your name is the fact that utilities are essentially necessary. That said, security deposits won?t be something you can avoid unless you raise your credit score to avoid these deposits to begin with.

  1. Makes your insurance premiums higher

Unfortunately for those with bad credit, insurance companies will also check your credit score. To weed away individuals with bad credit and to protect themselves from those who may not be able to pay their insurance premiums on time, insurance companies will often charge higher premiums.

Insurance companies claim that those with bad credit file more claims than those with good credit, even though this isn?t true in all cases. Even if you haven?t filed many claims yourself, in insurance companies? eyes, your bad credit score says it all. That said, it?s up to you to either improve your credit score or to be content with paying more expensive premium rates.

  1. Increases your loan interest rates

If you?re lucky enough to get approved for a loan, you?re still going to have to face the consequences. Lenders, because you will be deemed a risky borrower, are more than likely going to charge you higher interest rates. So, in the long-run, you?re going to be paying your lender back more money than you would if you had better credit.

If you?re hoping to apply for a loan soon but don?t wish to pay higher interest rates, improving your credit now is important. For more information on how to improve your bad credit score, check out

  1. Lowers your chances of getting a phone contract

Yes, even phone companies will check your credit, and guess what? If you have bad credit, you might just get your phone contract denied altogether if your bad credit score proves to them that you won?t be responsible for paying your phone bill on time.

Meanwhile, you can get a prepaid phone, a monthly contract, or phone service from a company that doesn?t do credit checks. On the downside, these contracts tend to be more expensive and may provide unreliable service when compared to a traditional contract. Regardless, there are definitely ways to get a phone contract with poor credit but not without consequences.


Not everyone is a finance expert, but the consequences of having bad credit is important to know. In turn of this knowledge, one will be more likely to be careful with their spending habits and their ability to keep up with the bills. Remember that your credit score is seen as a first impression of your financial responsibility to lenders, landlords, employers, and others.

Even if your credit isn?t that bad right now, working to improve your score can boost your chances of getting further in life quicker and dealing with less trouble along the way.

5 Habits That Help You Maintain Your Good Credit Score

5 Habits That Help You Maintain Your Good Credit Score

5 Habits That Help You Maintain Your Good Credit ScoreYour credit score is one of the most important numbers in your life. A good credit score can set you up for favorable lending terms. But, a poor credit score may mean you have to pay high interest rates ? if you are able to get a loan at all.

While it might not be the most exciting topic to think about, paying close attention to the condition of your credit score is an important step toward a prosperous future.

To make sure you are managing your credit score properly, think about maintaining these five habits.

Use Your Credit

That?s right ? it is good for your credit score to actually use your credit. By using credit, and then paying it off in a timely manner, you will be proving that you are a worthy credit risk.

Having no credit is almost as bad as having poor credit, so make sure to actively use at least a couple credit accounts. Of course, it should go without saying that you need to use them responsibly to avoid getting into debt.

Keep Credit Lines Open

Even if you have paid off a credit account, and you have no intention of using it anytime soon, it still may be worth keeping it open.

One of the elements of your credit score is the length of your credit history, so you want to keep some older lines of credit open for the benefit of this metric. Also, part of your credit score is the percentage of credit you are using, which will again benefit from keeping an account open which has a zero balance.

Stay Within Your Means

There are few things you can do which will be as helpful to your credit as simply staying out of trouble in terms of debt. Don?t buy more than you can afford, and you will be just fine in most cases. While it is good to use a credit card to build up your credit history, that card doesn?t mean you can spend as much as you want. Only make purchases as if you were making them with cash.

Monitor Your Credit

You should have no trouble at all finding a service which will help you monitor your credit over time. It is a good idea to use one of these services ? you may even get this free with your credit account ? to make sure that no surprise activity is taking place. You will see how your actions affect your credit, and you will be able to work toward a higher score using this information.

Find New Income Sources

Making more money is always going to be a good thing from a credit perspective. With a larger income, you won?t have to lean on your credit so heavily, and you will be able to avoid debt trouble down the line. Thanks to the power of technology, there are more ?side hustle? opportunities available today than ever before.


Do you have a good credit score? How do you maintain it?


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5 Things You Never Thought a Low Credit Score Could Ruin

5 Things You Never Thought a Low Credit Score Could Ruin

5 Things You Never Thought a Low Credit Score Could RuinCredit is a term that has been around for the past few decades. Your credit score affects everything you do and want to do, especially when it comes to big purchases such as a house or car.

We all know the higher the credit the better. We also know that if we have a low score we need to get it higher. But, why is that?

A low credit score deems you a risky borrower. Low credit scores can hurt you in more ways than you think. Here are some things you might not have known a low credit score could ruin.

1. Your Relationship

Money and kids are two of the biggest factors that can drive couples apart. If you hide your low credit score from your spouse, it can come back to bite you when you apply for a house loan, buy a car and even look at renting an apartment.

When you apply for a house loan, the mortgage company runs both your credit to see how reliable you are. If?your shady score pops up, the lender will most likely give you higher interest rates and raise the minimum down payment to make sure you won?t default on your mortgage. If this is also how your spouse finds out your credit score, things won?t be so good. Be open and honest and together you can work to improve your score.

2. Your Chance to Buy a Home

As stated above, a low credit score can block you from getting certain mortgages, low interest rates and a lower down payment. If your credit is very low you may not be able to buy a home. This is a major hindrance, especially if you found your dream home.

If you are considering buying a house, go talk with your lender and see where you are at. They can help you make a plan to get that score up so you can buy the home of your dreams.

3. Approval for an Apartment

Believe it or not your low credit score could make it hard for you to rent. Landlords do run credit checks to see how reliable of a renter you would be. If your credit history shows a lack of consistent payments or even paying off of debt, that could mean you won?t pay your rent on time and therefore not a good renter.

4. Your Dream Job

This one can really hurt you and can come out of the blue. You could be the perfect fit for the company, aced your interview then not get the job because you didn?t pass their credit check. Most employers will run a credit check as well as a background check. A low score could be a red flag for the potential of embezzlement, untrustworthiness and reliability.

5. Starting Your Own Business

Should the entrepreneurial bug bite you, a low credit score could mean not securing the business loan or line of credit to operate. As businesses start out they rely on the owner?s line of credit to get started and then build its own as the business grows. Low credit score means higher interest rates and a harder time securing the proper financial channels for your business.

These are milestones that have a major effect on your life. The good news is that it?s possible to raise your score. It does take time and creating better financial habits, but it can be done. Discuss your situation with a financial planner, lender, or a financially responsible friend and they will help you find where to start and how to go about getting that score up.


Do you have a low credit score? How has it affected your life? What have you done to correct it?


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7 Ways to Build Credit Without Credit Cards

7 Ways to Build Credit Without Credit Cards

7 Ways to Build Credit Without Credit CardsThe most popular and probably fastest way to build credit is to get a credit card. Those small plastic cards of magic can make or break a person and their credit scores.

Though a lot of people can manage and actually better their credit with credit cards, there are still a?lot who can?t. If you need to raise your credit score but you don?t trust yourself with plastic, you need an alternative. Here are seven alternative methods to build credit without credit cards.

Paying All Your Bills on Time

Sometimes rent and other bills are reported to the credit bureaus. This can help your credit score tremendously. Paying on time, and in full, will help your credit score. The more regular you are with payments, the higher your credit score will be, which can save you money by helping you get a better interest rate on future loans.

Student Loans

Now you shouldn?t take out student loans just to build your credit. Student loans aren?t there to increase your credit score. They are meant?to help pay for your schooling. But, student loans are a great way to build your credit by paying on time and making regular payments. It?s an installment loan. This means you pay for it over time and eventually pay it off, which is different than revolving credit. Credit cards are revolving credit, where you can continue to make charges and never actually have your entire balance paid off.

Get a Small Personal Loan

Personal loans can be attained from a bank or credit union. These don?t usually need to be backed by money you put down and you can get them for small amounts. Talk with your banker to see which or loans would be good for you to build, or rebuild, your credit. If the interest rate is low enough on a personal loan, you might even consider taking one out for a large planned purchase, even if you have the cash saved up already, just to improve your credit score.

Take Out a Special “Credit Builder” Loan

These loans are meant for people to help build their credit. The loan amount is minimal and you work for a year or two to pay it off. The loan payments are put into an interest-bearing CD or a regular savings account. This will help you build credit as long as you pay on time. The bank reports these payments to the credit bureaus to help improve your credit score.

CD Loans or a Passbook Loans

Another way to build credit without a credit card is with a CD loan or Passbook loan. These are loans made again what you already have in savings. This way if you default on payments, the money is already there to cover your missed payments. CD or Passbook loans are meant specifically for people who have no credit or a very low credit score.

Utilize Peer Lenders

Peer lending only helps your credit score if they report to the credit bureaus, so this is something to ask about before you apply for a peer loan. Peer loans could have higher interest rates than bank loans, but it’s still a potential idea to help increase your credit sore.

Get Signed as an Authorized User

This means you get a family member or a close friend to make you an authorized user on their credit card. So technically you are using a credit card, but you are not fiscally responsible for the payments. If your family member pays their bill on time, it can help your credit score. Discuss the usage terms for the credit card with your family member beforehand so no one?s credit gets hurt. This can backfire if your family member or friend doesn’t pay their bill on time or has a low credit score themselves.

There are ways you?can build credit?without credit cards, but it takes discipline and time. Budgeting, keeping up on payments, and paying off debt are huge for increasing your credit score. It?s doable but you need to be diligent.


Have you ever raised a low credit score? Did you use any of these ideas to build credit without credit cards?


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5 Ways Credit Cards Can Be Good for Your Budget

credit cards

credit cards can be goodWhen you think about using a credit card, you might think about them in a negative light. Obviously, running up credit card debt is not desirable for your financial future, so many people choose to avoid cards altogether because of this concern.

However, when used correctly ? and responsibly ? credit cards can be good for your budget. They are actually be a useful financial tool with almost no downside.

If you are trying to decide whether or not you should start using credit cards in your day to day life, consider the following ways credit cards can be good for your budget.

Build Credit Score

This is the point that most people know about, and it is extremely important. Using a credit card, and then paying if off?on time each month, is a great way to build up your credit score. You will be essentially ?proving? your ability to pay off debt, so creditors will be more likely to lend you money in the future for larger purchases like a new car or house.

Save on Interest Rates

Tying in to the point above, you can save money down the line thanks your higher credit score. A higher credit score can help you by securing loans with lower interest rates. You will be seen as less of a risk when you have a good score, which you’ll have built by using your cards responsibly.

Get You Through a Month

You naturally don?t want to have to carry credit card balances for long periods of time, but carrying a balance for just a single month won?t cost you much in interest if you need to work your way through a big purchase. If there isn?t room in your budget for a purchase that you need to make now, using a credit card to give yourself a few weeks of time to put that money together is a reasonable option. That being said, if you don’t know where the money is going to come from them you should steer clear of using that credit card.

Earn Rewards!

Who doesn?t love getting free stuff? If you use the right credit card on a regular basis, you might find that you accrue a variety of rewards that you would not have earned by simply using a debit card. The best part is that this strategy doesn?t need to cost you anything at all, and it won’t as long as you are paying off your statement balance by the due date each month. Look for a card that offers rewards which interest you, like travel rewards or cash back, and make sure there is no annual fee that goes along with it.

Learn Money Management

It can be tempting to have a big credit line at your disposal. But holding a credit card or two is a great way to teach yourself how to manage money properly. You can use your cards to purchase things that are within your budget and you were going to purchase anyway, but resist the temptation to buy things that you don?t need and can?t really afford. Money management is an essential skill to learn and can be easily taught with credit cards.


Do you use credit cards for any of these reasons? Can you think of other ways credit cards can be good for your budget?


Photo courtesy of: Sean MacEntee