What are the Ways a Bad Credit Score Can Affect Me?

In the same way that an annual physical can detect health problems early when they can be cured, checking your credit report annually also ensures more than just getting a view of your financial health.

Without at least checking your credit report annually, it is easy to miss early signs of identity theft hidden between your monthly purchases. As long as the perpetrator benefits from your stolen information, he or she continues to make purchases, open new accounts, and run up crippling debts.

Find out just the many ways a bad credit score can impact you, the ramifications, and ways you can improve your credit score.

What is considered a bad credit score?

Credit scores range from 300 to 850 points and are based on your credit history. If you’re consistently maxing out your credit cards and neglecting to pay your bills or mortgage payments on time, that track record can stack up against you. Current debts, frequent applications for new credit, the types of credit you use and the length of time you’ve had credit are all additional factors in determining your credit score beyond payment history.

Lenders use your credit score to determine whether you are a reliable candidate to receive more credit, such as a car loan, mortgage or credit card. While each lender has their own determination for what constitutes a good credit score or a bad one, a general guideline is that 680 and above is good to excellent while less than 620 is low to bad. The lower the score, the worse your credit, with ranges from 300 to 499 constituting bad credit scores.

How Bad Credit Can Impact You

Low or bad credit scores, while seemingly just numbers, can actually impact many areas of your life and make daily living very difficult. From cell phone plans to interest rates to home loans, bad credit scores can hurt your chances of getting approved with creditors and can cost you additional money. Some of the main ways low or bad credit scores can impact you include:

  • Difficulty obtaining a loan or credit card. If lenders and creditors think your credit history is a risk, they may not approve your applications for loans or credit cards. That can make purchasing a car, buying a home or simply getting an everyday credit card extremely difficult.
  • High interest rates. If creditors or lenders do approve your application, they often make you pay a higher interest rate than those with better credit scores because they view you as riskier.
  • Higher insurance premiums. In addition to interest rates, you may see your insurance premiums go up with bad credit because insurance companies link lower credit scores to a higher number of claims filed.
  • Difficulty landing an apartment, getting a cell phone contract or setting up utilities. Landlords, utility companies and cell phone companies all check your credit score. Landlords and cell phone companies can deny you, while utility companies may require a security deposit for utilities before setting up service.
  • Getting a Job: for many employers, your resume and references are only the first steps in evaluating candidates. Today, companies are checking the credit scores of applicants as part of the hiring process. A low credit score may prevent you from working in certain industries, especially financial industries and any job that requires you to manage money.

Ways to Improve Bad Credit

If you have a bad credit score, however, all hope is not lost. Here are ways to improve your credit score over time:

  • One of the most important steps to take is consistently making payments on time. Whether it’s credit card debt, a car loan or your mortgage, prioritize setting aside money to pay your bills on time every month.
  • You should also stop using credit cards as much or at all, if possible. Using only a small percentage of credit that’s available to you instead of maxing out your credit cards reflects well on your credit score.
  • If you have inaccurate debt that is hurting your credit score, you can begin the process to dispute your debt.

In order to dispute any inaccuracies on your credit report to keep it from unfairly damaging your future, you can call our credit report dispute lawyers at Blankingship & Christiano today at (571) 313-0412.

Why Choose Us

  • Seasoned Litigators with Proven Success in Multiple Fair Credit Reporting Act Cases
  • Skilled in Identifying Qualified Cases
  • Highly Knowledgeable of Consumer's Rights in Matters Related to Inaccurate Credit Reporting
  • Extensive Understanding of the Financial Harm Caused by Credit Reporting Errors and Identity Theft
  • In-Depth Knowledge of the Credit Reporting Agencies and Furnishers Operations