Subprime credit scores are those 619 or lower. When you have credit that is below 580 your everyday life can be seriously affected. From finding housing to even landing your next job.
In today’s society, we don’t need more obstacles to succeed. Understanding the consequences of poor credit and taking action to mitigate them will allow you to have a strategy to continue thriving in today’s society.
Here is a list of the consequences of having bad credit:
1. Higher interest loans.
2. Limited credit opportunities.
3. Limited access to services.
4. Limited access to housing.
5. Limited access to employment.
When Americans with bad credit try to obtain more loans or credit cards, they are turned away and told to find other options. If they are able to get loans and credit cards they are usually tied to higher interest rates.
The average American usually has an interest rate of 5% to 6%. Folks with bad credit will usually have interest rates above 6% and upwards of 12%. These interests can be counterproductive and destructive to one’s financial wellbeing.
There are a number of services that are mainly accessible through credit. Some of these services and products include solar panels, cars or motor vehicles, or even travel services like hotels and car rentals.
The frustration of not being able to take advantage of these services or products due to your poor credit history can really hinder you from enjoying your life.
When we take mortgage into consideration, poor credit can be an obstacle. Most lenders will deny your mortgage application due to low credit score. There are some lenders who will still consider giving you a mortgage due to score, but these have to be reviewed with a fine lens.
Although employers can’t refuse you employment due to poor credit, most of them include it in your background check. Employers take your credit score as a sign of poor diligence and disorganization. They review these as part of your character traits in order to see if you have the necessary profile for the role.
Bad credit is an obstacle you must overcome. You should focus on repairing your credit and showing that you can be responsible with your debts. If you’d like the option to be proactive towards your credit, looking into subprime credit cards can help you get started.
Starting by having flexible and fixed payments that you can tailor to your own case can help you by appearing to be a responsible debtor. This will help your profile in front of the credit bureaus and allow you to start improving your credit.
Removing bad debt from your credit history is also important. Consolidating your debt or settling your debt could be an option prior to bankruptcy.
