There are times when you have to rise up to an unexpected financial crunch and since you are caught unawares, you cannot find a way out but to take refuge in quick fixes and short cuts so that you can tide over the crisis. However, there are also times when you become financially irresponsible by choice and this is when the trouble starts and you gradually find yourself slipping into a vicious cycle of debt.
In this article, let us find out what are the consequences that you have to face if you harbor bad credit records in your credit report. So, read on for more information in the paragraphs that follow.
Side effects of bad credit
There are several adverse situations that you might have to face with bad credit; the prominent ones have been discussed in the points below-
- Credit loan application gets rejected
Do not be surprised if you apply for a loan and you find that your application for loan has not been approved. Why does this happen? This is because when your credit report shows that you are having bad credit, it implies your financially irresponsibility. As such, few creditors might be of the opinion that you may not be regular with the repayment schedule. Under such circumstances, their investment might be at stake. As such, most of the creditors refuse to work with you.
- Employment refusal/denial
In most of the cases, it has been observed that individuals that have bad credit in their report are refused employment. Why is it so? This is because the recruitments that take place in the higher levels of hierarchy oftentimes require devoted work hours and a lot of focus, which might otherwise be compromised if the candidate is having financial instability and has records of bankruptcy, bad credit, and lower credit score recorded in his credit report.
You can find extensive information about the same and topics related to it in many web portals and if it is Credit Karma, you can find out how accurate is Credit Karma, which has lots to say about bad credit and bad credit score.
- Insurance premiums are high
It is not just the employers that check your credit report but it is also the insurance carriers that look into your credit report prior to issuing insurance policies and deciding upon your premium rates.
It has been observed that if you have bad credit, the insurance companies assume that you will be an ideal candidate when the incidence of claims might be higher. As such, they prefer to offer a higher premium rate for your insurance policies.
Aside from the above, there are few other areas where you might feel the wrath of bad credit and some of them being inability to get rented premises as per your terms and conditions. Not to miss out that having bad credit means you will be under the close watch of debt collectors round the clock, which is not a very pleasant way to survive.