By: Rachel Quinn
You may be asking, “why do I need to care about my credit score?”
If you have bad credit or even no credit there are many things that you may not be able to do. That three-digit number has to power to make many aspects of your life more difficult than you had planned.
Here are some things that are hard or even impossible to get with bad credit or no credit:
- Not everyone can rent an apartment. Almost every apartment complex will check your credit score. If your score doesn’t quite cut it you may have to pay a much larger security deposit or even get a co-signer.
- A House
- If you have the cash, you could still purchase a home but if you don’t have access to all that capital you may need to take out a mortgage. Problem is, bad credit or even a lack of credit can cause many mortgage lenders to deny your loan. If you do get approved for a mortgage, a bad score could cost you thousands in extra interest.
- A Brand New Car
- You may be able to find a lender but your auto loan will come at a cost. If you don’t put much money down when you first buy the car, you may be paying more in interest than your car is worth.
- Cheap Car Insurance Payments
- If you purchase a car, the insurance cost may push you over budget. With a bad score you will end up paying a much higher premium.
- Personal Loans
- Getting approved for any loan can be difficult with a poor or limited credit history. The lower your score, the lower chance you have of finding a willing lender.
- Business Loans
- Do you dream of starting your own business? Without a quality credit score, lenders are more likely not to take a chance on you and your idea.
- The Perfect Engagement Ring
- When you head into a jeweler to find a ring, the jeweler will ask you the big question “what’s your credit score?” Financing a ring is just like taking out a loan, if you don’t have a great financial past, jewelers will not be able to work out payment installments with you.
Defaulting on a credit card or missing a car payment will come back to haunt you, sooner than you thought. If you want to learn more about building your credit score, check out our “Extra Credit” series.