So, you just got your new credit card, and you are excited to go shopping. Shopping feeds your soul, and it just relieves your stress instantly. You use your credit card carelessly, and after a few months, you’ve noticed that you have almost maxed it out. You decide to shrug it off and get a new card, and you continue shopping with it. This scenario is definitely one that you never want to get caught in.
Why, you ask? First of all, putting it all on your credit card is already a bad decision. Not only are you incurring a lot of debt, you are also putting yourself in a difficult position. Do you have a solid plan on how you are going to pay everything? If not, then you are in big trouble. There is this thing called bad credit, and the biggest contribution to it are credit card payments and high levels of debt.
I bet you have another question in mind, and you are wondering what bad credit can do and how it can affect your life. We are enumerating the ways bad credit can affect your life in Australia, and basically, anywhere else in the world.
Your Loan Applications Might be Declined
Although some companies offer bad credit home loans and bad credit car loan, it will still be difficult for your loans to get approved. Lenders in Australia, and anywhere for that matter, heavily rely on credit scores and reports when deciding on approving applicants. If you have a high credit score, then you will most probably be approved, and you might even get 0% financing plus a low interest rate. However, if you have a poor or bad credit score, then your risk of getting declined is high, and your interest rate and down payment will be bigger, for the protection of the lender.
Getting a Cellphone Contract Would be Almost Impossible
Mobile companies check your credit, too. They need you to be reliable and responsible, as they will be extending their services to you. If they find out that your credit score is bad and that you have lots of debt, then the probability of them approving your application is low. Opting for prepaid is actually not a good choice, as this can get pretty expensive than having a postpaid account.
You Might Find it Difficult to Get a Job
Companies care about your image and standing. They take a peek at your credit report, and sometimes when it’s bad, they won’t employ you. Having piles of debt and outstanding bills can affect your performance at work, and the company would rather not risk it.
You May Find it Hard to Put Up Your Own Business
Unless you have heaps of money on hand, then you will find it hard to start a business. You are probably thinking of borrowing money from the bank for your capital, but you’ll be surprised to know that banks take a peek at your credit history, too. They often limit the amount for applicants with a bad credit score, and you probably wouldn’t be getting too much.
You Would Have to Deal with Security Deposits
It is a must for utility companies such as phone, cable, and electricity to check your credit score and report, as it is part of the application process. These companies are looking for protection in case you do not pay your bills, so they often require a security deposit for people with poor credit. You have to pay for it upfront, which can cause a lot of hassle, especially if you do not have money on hand.
Life would be so much easier with a good credit score and report, so you better work hard for it!