Reading Time: 3 minutes Things You Can’t Do With Bad Credit
Your financial health hinges on managing your credit. However, are you aware that blemishes in your credit or a bad score can keep you from getting a variety of things you need in your day-to-day life?
Not to mention bigger things, like car loans and a home loan. That said, you might be surprised at the options that will be closed to you if you have a low credit score. Here’s a quick look at a few of them.
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? If you have a 580 credit score, many property management companies, and even private property owners won’t rent to you. These days, it seems as if their credit requirements are becoming ever more stringent.
Buying Or Starting A Business
If you’ve ever wanted to be an owner of a franchise, such as Baskin Robbins or Subway, you’ll need to have good credit. Poor scores can keep you from financing a franchise or result in a down payment that’s out of this world. Additionally, it can keep you from getting a commercial lease.
If you wanted to take out a bank loan to start a small business, that’s out too. For a bank loan for a startup, you’ll need to have good credit. Startups aren’t exactly inexpensive and most people need to take out a loan of some sort to finance one.
If you have a credit score lower than 650, a bank will nearly always turn you down.
Getting A Mortgage
Just to make this clear, you’ll still be able to purchase a new home if you happen to have the entire purchase price just sitting in your bank account. However, not many of us have that kind of money and will need to take out a mortgage.
If this is you, the difference between having an excellent credit rating or a mediocre one can cost you more than $10,000 over the life of the loan in interest. It could also get you denied.
Employment
More often these days, employers are conducting credit checks on prospective employees. Pre-employment credit checks are especially being done for financial or government jobs. Again, this is becoming increasingly common. So, if you want to get a decent job, you’ll need to have good credit.
Get Married With Bad Credit
When you decide to get married, your debts become those of your spouse. This means that the person in question might be more than a bit wary of taking on out-of-control debt and inferior credit.
Car Loan
You might want to take out a loan to purchase a new vehicle, whether you do it from a dealer or from your bank. If you don’t have good credit, you’ll more than likely have to pay exorbitant rates for interest and you may have to put down an abnormally large down payment, and you may even be denied outright.
If you have a score lower than 550, you’ll likely need to have someone cosign for you.
Student Loan
Some federal student loans don’t take your credit score into account, but many of them do require you to have good credit. Even if you get one while having imperfect credit, you’ll pay thousands more in interest over the life of your loan.
In Conclusion
Everyone knows having good credit is a good thing. However, not everyone knows all of the challenging things about having sub-prime credit. These are just a few of the disadvantages. You also might not be able to get a personal loan, car insurance, financing for dental care, and more.
Do you know what your credit score is? Go to CreditNerd now and find out.
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.