You may be the type of person who lives a care-free life, adopting the motto that we should all go through life without sweating the small stuff. Undeniably, many of us do worry too much. It is possible, however, to worry too little about your credit report. Bad credit can cost you more than just your peace of mind. Bad credit can cost you amenities and opportunities that will ultimately be measurable in dollars and cents. That is something you should worry about.
When you have bad credit, your ability to make major purchases will be limited. Buying a car or a house will be hindered by skittish lenders. If you are fortunate enough to obtain a loan, higher interest rates resulting from your poor credit score will significantly increase your monthly payments. Higher interest rates will also be applied to your credit card balances. If you do not have a credit card, the likelihood of being approved for revolving credit will be diminished.
As odd as it may seem, obtaining a cell phone contract may be as difficult as obtaining credit. If you have demonstrated that you can not be relied upon to make your payments on time, cell phone service providers may doubt your ability to make regular payments for the duration of a two-year contract – and they do check your credit. Apartment landlords will also be cautious, seeing you as a risk – and they also check your credit Before they agree to let you sign a one-year lease, expect to pay minimally first- and last-month’s rent payments. Similarly, utility companies (electricity, gas, water and sewage) may ask for a security deposit before starting services for you if your credit is poor.
These merchandise and service providers all have access to your financial information under the Fair Credit Reporting Act. As such, a happy-go-lucky approach to your finances will put you at a disadvantage when trying to obtain services. Moreover, you may find it difficult to mend the damage to your credit, as this same legislation makes your credit history available to potential employers and investors. You may not be hired for particular jobs, especially if they demand fiscal responsibility, and financial institutions may not lend you the money necessary to start your own business.
Fiscal responsibility means that you should adopt a motto that demands you live (and spend) wisely, thereby avoiding worry. The opportunity costs and hidden costs are measurable. One analysis published last year suggested that, over your lifetime, bad credit could cost you in excess of $200,000. This is indeed something worth worrying about if your credit report is not consistently in good standing. If you are worried about your credit or if your credit is in disrepair, and you would like some help, Ovation is a click away.