The Hidden Consequences of Bad Credit
Carrying bad credit can cause headaches for many reasons. Besides the financial complications, bad credit often extends to other areas of a person’s life. These consequences may go unnoticed for quite some time, which is why it’s important to recognize hazardous areas early to avoid troublesome situations. Here are a few areas to keep an eye on.
Utilities and Amenities
Most major utility companies look at customers’ credit reports. While poor credit may not result in a blatant service refusal, the company may require a security deposit to mitigate the financial risk. Cell phone companies, as well, have begun to run credit checks on applicants since they too offer month-to-month contracts. Regardless of your past payment history, a low credit score reflects unreliability, which may limit your options to prepaid packages or other restricted plans. The same can be said for landlords and realtors: Bad credit hurts your chances of finding a place to live.
Especially for management level positions, many employers request to see a credit report as a part of the “pre-employment screening process.” Here, all of your debts, collections, and credit items are assessed in terms of what they say about you. For example, late payments could indicate tardiness in the workplace, or lack of responsibility. Similarly, when starting a business, bad credit can hurt your chances of funding for similar reasons.
Believe it or not, bad credit comes up during couples’ therapy sessions, particularly just before or right after marriage. Serious relationships require openness about financials, and many people learn a lot based on their partner’s credit report. Furthermore, bad credit may affect spouses negatively in terms of the aforesaid hidden consequences. In divorce settlements, splitting assets also becomes a complicated matter when one has poor financial standings.
High Premiums and Interest Rates
Just like employers, insurance companies and financial institutions thoroughly examine credit reports before signing anything. Typically, the more of a risk you are, the more you will pay in interest. In some situations, however, applicants will just be refused. For auto loans and mortgages, this is one of the most significant consequences of bad credit.
Thankfully, Trillium Auto Group chooses not to penalize customers due to past problems with creditors. In fact, besides guaranteeing auto loan approval, the company’s financing plans work to repair credit scores and eliminate the above problems. In effect, Trillium solves more than just the high-interest dilemma: Month-after-month all of the other problems will slowly dissipate. End your credit troubles today and speak with a Trillium Auto Group representative.