Extra Fees
For those who get behind on their loan payments, it can quickly become impossible to repay their debts. This is because lenders will begin charging them late fees. When lenders don’t get paid on time, they charge ridiculously high fees to try and recoup any money they can before the buyer stops paying. Unfortunately, the high fees often make the situation worse.
Higher Interest Rates
For someone with bad credit, it becomes very expensive to purchase something using credit. They are often charged higher interest rates because the lender is taking on a high risk by extending them credit. The higher interest rate will often add thousands of dollars to the cost of the loan over the loan’s lifetime.
Losing Employment Opportunities
Many employers will view a job candidate’s annual credit report before hiring them. The employer rationalizes that if a person cannot manage their finances and accept responsibility for their debt obligations, then they may not follow through on their work responsibilities. Added stress from credit troubles can distract the individual from doing their job at a high level of performance.
Increased Insurance Premiums
Some states allow insurance companies to charge higher premiums based on the individual’s credit score. Depending on the credit score, the premium could more than double for those with a poor score and myriad credit issues.
Relationship Problems
Everyone knows that money problems are the number one reason couples argue. Having a bad credit score or several credit issues can increase the stress on a relationship. Constant phone calls from creditors only add to the stress and fuel arguments that would not otherwise take place.
Summary
To avoid bad credit and the unfortunate scenarios that come with it, view your free annual credit report. Viewing your free annual credit report allows you to monitor the credit report and score. It also allows you to proactively fix errors on the report, ensuring you that your credit is in good standing.
Take control of your credit before it controls you!
