Having good credit is essential for maintaining a healthy financial situation. Whether you’re looking to buy a home or need to take out a loan, having good credit gives you access to the resources you need to succeed. Having bad credit can significantly limit what you can do. Below we share things you can not do with bad credit.
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1) Renting An Apartment
You might not qualify for your mortgage loan because of your credit, but you’ll still be able to rent an apartment, right? Many property management companies and private property owners won’t rent if you have a low credit score. These days, their credit requirements are becoming ever more stringent.
2) Applying For Utility Services
Your credit score can also affect your ability to get utilities in your name. Many companies check your credit before allowing you to open an account. If it’s higher, they may be happier about that.
If you find yourself running into this problem repeatedly, it may be time to look at your credit score and see what you can do to fix it.
3) Securing A Cell Phone Plan
In the same way that some utility companies check your credit before opening an account, some cell phone carriers will also look into your past charge-off or bankruptcy.
If they find a blemish on your report, they might not be willing to offer you a contract. That said, it’s worth calling around and seeing what plans are available to you – even if the best option is prepaid.
4) Buying Or Starting A Business
Finding funding for your business can take time and effort when you have bad credit. Business loans and startup financing are often only available to those with good credit scores since these loans are more of an investment.
It’s risky to lend to someone who wants to start a business if that person has struggled to manage their own money.
5) Getting A Mortgage
One challenge many people with bad credit face when getting a mortgage is securing the necessary down payment or collateral. Many lenders will require a down payment of 20% or more, which can be difficult for many borrowers to afford on top of the other associated costs of purchasing a home.
In addition to the high down payment requirements, lenders may ask for additional collateral to secure the loan, such as stocks and bonds.
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Because of these potential challenges, it is crucial to work with a lender specializing in bad credit mortgages who can help you find the best terms for your unique situation.
You will face many challenges when trying to get a job with bad credit. One of these challenges is that employers may be hesitant to hire you because they don’t want to take any risks, and having bad credit can make you seem like a risk.
Many employers nowadays run background checks on prospective employees; any bad marks against your name could impact their decision to hire you. Pre-employment credit checks are prevalent for financial or government jobs.
7) Get Married With Bad Credit
OK, you can get married with bad credit. But it’s hard. So many marriages fight over finances. When it comes to money, being in a relationship with someone with bad credit can make things difficult.
8) Car Loan
You can take out a loan to purchase a new vehicle, whether you do it from a dealer or your bank. If you don’t have good credit, you’ll more than likely have to pay exorbitant rates for interest, you may have to put down an abnormally sizeable down payment, and you may even be denied outright.
9) Student Loan
Taking out a student loan is often considered a significant advantage in life- it gives students access to higher education and helps them achieve their professional goals.
When you have bad credit, getting approved for a student loan can be challenging. This is because private lenders typically offer student loans and perform credit checks on all applicants as part of the approval process.
10) The Most Important Thing You Can’t Do With Bad Credit: Give Up
While having bad credit can be challenging, there are steps you can take to improve your financial situation. By working with a reputable lender specializing in bad credit mortgages, you can find the best possible terms for your unique needs and circumstances.
Whether securing a job, purchasing a car, or getting married, achieving these milestones can help you get back on track and start rebuilding your credit. So don’t give up. Keep working hard, and you can overcome these challenges and achieve your financial goals.
Next Up From ChaChingQueen
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Greg is a Chartered Financial Analyst (CFA) with 22+ years experience in Financial Services. He has held numerous FINRA Securities licenses (series 7, 63, 65, and 66), and is an expert on Investment Products and Financial Planning. Greg has 22+ years experience as a real estate investor and degrees in Psychology and Philosophy.
Greg has been quoted/interviewed in Yahoo Money, Yahoo Finance, USA Today, Authority Magazine, Realtor.com, Business Insider, and others.
Greg is an avid runner, and the father to identical twin girls and their awesome brother. His love of budgeting and his kids led him to join The Great Resignation in 2021.
Disclaimer: Any Financial Tips on ChaChingQueen are general and informational. Speak with a professional about your specific situation.