January 19, 2019

The Disadvantages of Bad Credit

Carol Ringwald

Carol Ringwald
Owner/Credit Medic Group

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People all over the world think of living an aristocratic life which is why people are always looking for ways to increase their income and credit so they can solve their finance-related problems. As a result, many live beyond their means.

Many do not understand the impact that bad credit can have on their ability to live the kind of life they dream about. Low-interest credit cards, home loans, auto loans and even rental space are very hard to get without good credit.

Even when a person goes for some kind of an interview for a job, there are employers who will pull your credit report to see if you are financially responsible or not. This is done because the employers want to hire someone who responsibly pays their bills on time and doesn’t have any liens or judgments against them. They reason that if the person is responsible for their own money, they will have the company’s best interests in mind as well.

Living life to the fullest typically means the acquisition of such things which can make life more comfortable and relaxed, such as a purchasing a home. If a person has bad credit it can prevent them from obtaining their dream home. It’s possible to purchase a home under some programs with a credit rating of 630 but to get optimal funding and lower interest rates, you should have a credit rating of at least 720.

Therefore, it’s very important to increase your credit score prior to considering a home purchase. Unfortunately, most people mistakenly believe that credit repair is going to take years and so they elect to do nothing. But this is the wrong approach. It takes an average of 4–6 months to increase your credit scores, but of course, this depends on whether or not you have outstanding debts to be collected or a history of late payments. If you do, then it may take closer to 9–12 months before your credit score is high enough so you can qualify for a home loan with a reasonable interest rate.

Even if you are not in the market for a new home, it is essential that you do the best you can to get your credit scores at least to the 720 score. If not, you are pretty much guaranteed to pay more interest on your credit cards and higher insurance premiums for your car.

But one thing is for certain, if you do nothing then your credit score doesn’t have a chance of being increased and you will continue to pay more for the things you need. Which in turn, gives you less money to save for your dream home, a new car, your children’s education and retirement.

The choice is yours.

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