5 Potential Problems That arise as a Result of a Bad Credit Score: How Good is Your Credit Standing?

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One way of looking at your credit score is that it is the key to unlocking the door to a range of borrowing options from getting a mortgage to applying for a credit card or loan.

If your credit score doesn’t make the grade you will find that some of those doors will remain firmly shut and your chances of getting the finance you want are greatly diminished.

There are products aimed at borrowers who have a less than perfect credit score and lenders like Everyday Loans are often prepared to consider your application and give you the chance to improve your rating by making all the payments due in a timely manner.

Here are some of the potential issues you will likely have to contend with if your credit score is bad.

It will be tougher to get a loan

Your credit score is a reflection of your financial standing and it what lenders rely heavily on to decide whether to grant you a loan or not.

Your credit score provides an indication of how likely you are to repay a loan and whether you make payments on time, and haven’t missed any payments.

If you are late paying or default on a loan repayment schedule it is bound to impact your ability to get credit in the future.

Your score is representative of how reliable and punctual you are with your payments and a lower than average score will mean you might not get accepted by some lenders and you may have to pay a higher interest rate as a result.

It is not just loans that can be a problem

You should be aware that having a low credit score can also have an impact on your ability to get a rental deal on a property.

Landlords can also use a credit score to gauge your reliability as a tenant when it comes to paying the rent.

Expect to pay more for insurance

You may not be aware that some insurers will also run a credit check on you to see what your score is like.

There is believed to be a link between a poor credit score and an increased likelihood that you will make a claim. Therefore, you shouldn’t be surprised if you pay a higher premium as a result of a bad credit score.

It could hold back your career prospects

Don’t be surprised if your prospective employer asks for your consent to run a credit check on you as part of their pre-employment checks.

This is much more likely if you are going to be working in a position of trust or handling money.

If your credit score is poor it could deter an employer who might think that you are not as trustworthy as they would like, even if you think that is not a fair reflection of your personal standards.

Utilities can be more expensive or difficult to get

You will probably be getting a theme by now as to how important your credit score is and another potential problem is when you are trying to sign up with a broadband provider, or a gas and electric supplier.

If your credit score is low they might ask for a deposit, charge you a higher tariff, or even refuse to extend you credit and offer a prepaid deal only.

Your credit score should be viewed as a passport to getting better deals and taking advantage of certain opportunities, which is why it is wise to try and keep up to date with your payments and take steps to repair the damage if you do miss a few payments.