If you need a loan, one of the first places most credit providers will check is your credit history. This is part of the application process and will determine whether you are credit worthy or not. This is just an example of how bad credit affects your credit worthiness. It is important to understand that there are several things which could affect your credit score. Bad credit history is not necessarily limited to not paying your debts or filing for bankruptcy, it is a bit more than that. Two other areas that can add a black mark against your credit score are late payment of bills and shopping around for loans. These can all add to a bad credit history and that can affect your credit worthiness in the following ways.
A bad credit score affects your chances for employment
Employers can now look at your credit score (with your permission) and use it to decide whether to hire you or not. While this is not always the case in some industries, it is often an issue with jobs in finance. If you are searching for a job in the financial industry, employers want to see that you are capable of handling your own finances and a bad credit score is a dead giveaway. Also, having bad credit makes you appear unreliable and this is definitely a problem with prospective employers.
Bad credit can make it harder for you to get financing
If you are starting a business and are in need of financing for your start-up, bad credit can affect your credit worthiness. Increasingly, small businesses are finding it harder to gain access to capital either to start or expand their businesses and a poor credit rating can easily be interpreted as an applicant’s inability to handle money. This is not the conclusion you want a bank to come to if you are searching for funding for your business.
Bad credit affects access to financing for your home
If you have a low credit score or a bad credit rating, you are going to have trouble gaining access to financing for your home particularly if you are not able to come up with a large down payment. And if you are thinking of renting, it is possible for a landlord to demand your permission to see your credit score as part of the requirements.
No matter how you look at it, these days, bad credit affects your credit worthiness on almost every facet of your life.