How Bad Credit Can Affect More Than Your Finances
It is all too easy to max out your credit card and when it comes to paying back your credit card debt, you may encounter some difficulties. Unfortunately, delayed repayments do not go unnoticed and if you fail to keep up, your credit rating plummets to depths that are hard to recover from. This is also the case with cash loans and any other kind of missed payment but, whatever it is, it all gets recorded in your credit report.
Bad debt is a huge problem in Australia and it only seems to be getting worse. You may wonder what the problem is with a bad credit rating. While bad debt is obviously an issue, it is something you can work towards paying off and once you do that, you’re back to square one, aren’t you? Well, not quite. Financial problems might be the obvious issue but there are several other issues that will affect you as the result of a bad credit history. Life is about to get tough.
You will immediately encounter difficulties with any further loans you wish to take out. After all, any reputable lender will carry out a credit history check to make sure their client is actually able to keep up with repayments before throwing any money at them. Your bad credit will be one very solid reason why they should refuse you a loan because your history will indicate that loaning you anything is just far too risky. But all is not lost. You will be pleased to know that some lenders will take that chance anyway. The downside is that they will give the interest rates a significant boost to make their risky client worth banking on.
It gets worse. Anything you try to do where money is involved will be affected and this includes renting an apartment. Landlords only want tenants who can reliably pay their rent and if their credit check shows that you may not be such a tenant, you will need to have some pretty impressive negotiation skills to sway them. However, if you are lucky and they are lenient, you may get away with a huge security deposit to cover any inevitable late payments. But even if you get your apartment, applying for utilities will present the exact same problem. Whether you need electricity, water or an internet connection, all providers will do their homework and, once again, you may have to deal with a sizeable security deposit.
The only way out is to pay off all of your outstanding debts and even then, it will take a long period of reliable payments where it counts to improve your credit report and make you more eligible in the eyes of the financial powers that be. But, of course, there are even obstacles here - you may not even be able to get a job. Not every workplace will turn you away and there will always be an opportunity for you to flip burgers but if your area of expertise happens to lie in the finance industry or upper management positions, you will be expected to have a stunning credit history. After all, at that level employees need to know how you will handle their money and potential employers will carry out extensive credit checks on their candidates. It doesn’t matter how good you are at the job, a poor credit history will not win you the position.
In addition to this, the stress of your situation can ultimately have a negative effect on your health. There are many health issues associated with stress, including high blood pressure, and as your life is affected so harshly, it can only get worse. In turn, it will also affect your loved ones, as well as your relationship with them, and if you happen to have children it will become very hard to support them.
Your credit score has a huge influence over many aspects of your life and so it is vital that you keep it in good shape. Some careless spending now could result in homelessness, unemployment and serious financial issues later on and the deeper you find yourself in a financial black hole, the harder it is to dig your way out.