If you have bad credit, you are probably quite aware that you have a problem. You know you need to do something about it in order to obtain reasonable financing, but do you know what else your bad credit is costing you? Take a look at some of the other ways that bad credit affects you.
Makes It Tougher To Get A Job
Getting a job can often be considerably harder if you have bad credit. Many emplyers will now run your credit as part of their pre-employment screening process. If you are employed in the finance industry, a credit pull is almost insured, but even other non financial industries are getting into the mix.
A bad credit profile could mean instability for an employer. To them, it might signal that your life is in disorder or that you are irresponsible. Neither of these things are something that an employer would want to deal with.
So, believe it or not, bad credit could keep you from getting a job.
Costs You More Money On Insurance
What, credit is a factor with auto insurance? Yep.
Like it or not, one of the factor that auto insurers often use is credit rating. Insurers like to use facts and statistics to figure out risk. Somewhere along the line, they started to figure out that those with worse credit got into more accidents.
What this means for you is that you might just have to pay more money for auto insurance. You might be one of the safest drivers around, but with bad credit, you will be lumped into the bad driver category.
Causes You To Pay Higher Deposits
Planning on moving anytime soon? If so, that bad credit is going to cost you. Expect to pay more for all those little pesky deposits.
Utilities like water, gas and electric will charge you hundreds of dollars because of your bad credit. If you are renting, which you likely are with bad credit, you should also expect to pay a much larger housing deposit.
Overall, when moving with bad credit, you can expect to pay hundreds of dollars more in the form of deposits.
Can Cost You A Home
Looking to rent a house? With bad credit, they might flat out refuse to lease to you. Most apartments will generally rent to those with bad credit, although with higher deposits. Landlords are a different breed however.
Landlords for house do not have to come up with as many tenants. That means that they can be much more choosy. If you have bad credit, getting a rental house could be a major ordeal.
Time To Fix That Bad Credit
This just scratches the surface of what bad credit can do to you and your financial life. So, how can you fix it? It is not that complicated, but it takes some financial discipline. Here is what you need to restore your credit.
Pay Bills On Time
This is the main factor that affects your credit. You need to show that you can pay your bills on time. What does a creditor want ,they want to get paid.
From this point on, pay all of your bills. If you have defaulted on some accounts, get a secured credit card and use it to ay for your gas. When you get your bill, pay it promptly.
With just 6 months of on time payments, you can start seeing some improvement.
Use Less Of Your Credit
The next biggest factor is credit utilization. This is how much of your credit you are using. If you have 1000 dollars in available credit and you are using 800 dollars, you are at 80 percent. This is not good.
Your credit utilization is considered good when it is below 30 percent. It is considered great when it is below 10 percent.
Work on paying down that debt by focusing on one credit card at a time. Pay the minimum on all but the one with the highest interest rate. Pay as much as you can on that one until it is paid and then move on to the next highest interest rate. By going this, you maximize your money and pay less interest.
It takes time to restore a credit rating. You can sink it overnight, but it could take years to repair the damage. You can, however, start seeing some results in about 6 months if you are patient and stick to a plan.
Keep the faith, pay your bills on time and stop adding to your credit card debt. That is the best thing that you ca be doing at this time.