Even with the best of intentions, some Illinois residents struggle to maintain good credit. A bad credit score can have serious impacts on various areas of your daily life. These are some of the biggest disadvantages you can expect.
Lenders consider you a poor risk
Adverse credit issues mean that lenders will consider you a poor risk to extend loans or issue credit cards when you need them. If you apply, there is a much higher chance that you’ll end up rejected, which means you may find it challenging when seeking a car loan or mortgage.
Higher interest rates
If your credit score is in the bad range and you do end up being approved for a loan, you can expect to be saddled down by high interest rates. Because you’re considered a poor risk, lenders want to protect themselves just in case you renege on making payments. Typically, interest rates are very high for people with bad credit.
Difficulty finding certain jobs
A poor credit score can make it difficult to secure certain types of jobs. Specifically, those in the finance industry require candidates to have solid credit scores. If you apply for a job that requires you to handle money, you’ll be viewed as a poor candidate and possibly turned down for the position.
Higher insurance premiums
Insurance companies want to ensure that you are responsible. As a result, they may check your credit score to assess you as a policyholder. Unfortunately, insurers find that if your credit is poor, you’re more likely to file a claim with them. This results in higher insurance premiums even if you have no such history.
If your credit leaves much to be desired, the best thing is to improve your score. It can help your creditworthiness and address these and other issues.