How bad credit loans impact personal life
A bad credit report can significantly impact your life. However, before we discuss the effects of bad credit and it can influence your lifestyle, it is essential to first understand what a credit report entails.A credit report is a detailed compilation of your credit history and is typically prepared by one of three primary credit-reporting agencies – Equifax, Experian and Trans Union. The details of the report are generated through creditors who have granted you loans. These would include landlords, hospitals, banks and other financial institutions.The instances of bad credit may involve delayed clearance of medical expenses, rent, mortgage or other utilities. You may have at some time overdrawn your bank account, or failed to make your credit card payment on time. In such cases the respective creditors will report this information to any one of the credit agencies. This will result in your credit report being blemished with negative marks. Having analyzed the reasons for bad credit, let us now discuss the effects of bad credit.
In the event that you need to buy any insurance policies such as health, life, accident, medical etc., the presence of bad credit will require you to pay higher premiums. Since employers do regular check ups of the credit histories of their employees, it is imperative that as an employee your credit report is not hindered by the effects of bad credit. A negative report can prove to be detrimental for your career progression.So also for new job applicants, a negative or bad credit report will prevent them from getting a job of their choice.
The effects of bad credit can even translate into your personal life where getting loans for major purchases may become difficult. And if you do get the loans, you might land up paying exorbitant interest rates. Even with a tarnished credit history it’s possible for you to obtain a bad credit loan.
The cost of bad credit can prove to be very high. It is important to keep the credit report error free. Whatever situation you are in life, applying for a new job, hoping to grow in an existing one, needing loans, paying mortgages, or dealing with lenders, it will demand an inquiry into your credit history. Therefore to avoid bad credit on your credit report, it best to manage your finances wisely from the beginning.Having bad credit may impact your life in more ways than you think. The most common effect is the difficulty in obtaining low rates on loans, mortgages, lines of credit, and credit cards. With bad credit, you may be approved for a loan or credit account, but chances are you will be subject to lower credit limits and higher interest rates for the balances you accrue on your accounts. This, over time, can cost you more money, which can create more financial problems in the future.
Having a bad credit rating can also affect job opportunities in certain fields of work. Keep in mind that when you apply for a job, the employer needs your permission to run a credit check by law. The Fair Credit Reporting Act states this, and it is a violation of that act if your credit is checked without written consent. However, a good deal of finance careers will check your credit, primarily if you will have access to large cash amounts at your potential job. Examples of such positions are bank tellers, financial officers, mortgage brokers and even high-end jewelers. The thinking behind the credit check is that a person with bad credit may pose themselves as a risk to abuse the power in their position (i.e. steal money, accept bribes, or conceal or hide jewels.)If you are applying for any of the above job opportunities, you will want to be prepared to discuss your credit report should the subject come up. If your potential employer advises you that they will be running your credit report, be upfront and honest about any questions they may have. Once they run the report, the information will be right in front of them, so do not try to deceive them. You see, in this instance, the credit check is not so you can be approved for a line of credit, it is rather a survey of how you handle debt, whether you are responsible for your finances, and perhaps even to see if you are carrying too much debt for the salary they may offer.
If you ran into a bad credit situation recently (or maybe not so recently) be prepared to explain it. Maybe your financial struggles are as a result of an accident and you were out of work for some time. Perhaps you were the victim of identity theft and were unaware. Whatever the case may be, your honesty (or lack thereof) may be a deciding factor. It is important that you are prepared to face credit report inquiries with complete honesty.If you happen to be in a bad credit situation, take charge of your credit standing and realize that you can change it. If there are some discrepancies on your credit report, credit repair may be the answer. You can get these items disputed and investigated. Anything incorrect or that cannot be proven will be removed from your credit report. Financial relief si the most important issue in here.
If you are still trying to work down existing debt and it seems to be getting out of control, debt negotiation may be your way to go. You or professional debt negotiator can negotiate a reduced amount from your original outstanding balances allowing you to pay down your debts faster.There are different methods and lots of help out there so you can start your bad credit repair.Keep in mind that if a potential employer sees that you are making an effort to get back on track, this initiative may sway them into hiring you, regardless of your credit score. Do not miss out on a job opportunity because of bad credit. Do all you can to get them to count you in.