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.

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