Numbers don’t lie, and your credit score is not one of the most important numbers to keep an eye on right now.
A poor score can threaten to deny you lots of opportunities in many aspects of life. For instance, it can limit access to everyday essentials and skyrocket the cost of opening accounts and acquiring funding.
On the flip side, if well managed, Credit Score can help one achieve various milestones e.g., launching a startup, buying a home, etc., and make life a lot easier in many ways.
Service providers and companies pull a credit check to gauge how well you manage your finances and the likelihood of paying loans and bills as scheduled. Therefore, a poor score means most companies won’t do business with you–or will increase the cost of doing business to cover the apparent risks.
8 Times Poor Credit Score Will Disappoint You
Below are some instances when a poor credit score will disappoint you:
When borrowing a loan
For lenders, an applicant’s score tells a lot about their creditworthiness and money habits.
It’s no wonder credit checks are a standard underwriting procedure–whether you’re seeking out a mortgage, business loan, or auto loan. Even some personal loan providers don’t lend money to bad credit borrowers. Or if they do, they charge a higher interest fee than they would for a good credit borrower.
When you need to rent a house
Landlords risk missed payments with every tenant their welcome into their apartment. Often, they pull a credit check to confirm if a potential tenant can manage monthly payments.
As a consequence, those with lesser-than-expected scores are considered high-risk and may be rejected unless someone else co-signs.
When looking to enjoy card bonuses and rewards
A credit card is a helpful financial safety net provided you settle full balances every month.
Different credit cards have special reward programs. These incentives gift cardholders through cashback, points, or air miles.
Though myriad cards have rewards, the best offers go to card users with good credit ratings. And with a poor score, you won’t get registered to the best reward cards.
When you need to open a utility account
Utility bills are recurring payments, no wonder service providers who sell essentials like water, electricity, and internet services run a credit pull before enrolling users into their program.
If you have lesser-than-required credit points, you’ll need a cosigner or a security deposit to cover the perceived risks.
Other challenges you’ll face due to poor credit ratings include; difficulty registering a cellphone plan, problems getting an Insurance policy, and sometimes, difficulty winning a job.
Don’t wait until it’s too late. Start building your credit through best practices like changing your money habits, paying bills on time, reducing the number of credit cards, etc.
Author Bio: Michael Hollis is a Detroit native who has helped hundreds of business owners with their merchant cash advance solutions. He’s experimented with various occupations: computer programming, dog-training, accounting… But his favorite is the one he’s now doing — providing business funding for hard-working business owners across the country.