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What Does Having Bad Credit Cost You?

In our Credit workshop, we talk about how having a good credit history is an asset. Are you really aware of what having poor credit is costing you?
Most people are not aware of the real cost of poor credit. Your credit history is used in much more than determining if you qualify for a loan.
Your credit history impacts such things as:

  • Renting an apartment. Potential landlords will often ask you about your credit history and look at your credit report. They may refuse to rent to you if your credit score is low, or if you do not have a credit history.
  • Getting a job. Your credits score can impact your employability, as employers may screen candidates based on their credit.
  • Insurance rates. Your home insurance may be higher if you do not have good credit. In other provinces your credit can also affect your auto insurance.
  • Buying a car. Yes, there are auto lenders who lend money to people with poor credit, but do you know what their interest rates are? We have seen rates as high as 30%! If you buy an automobile with a loan at that rate, you will likely never pay off that loan before you need a new car, and a new (additional) loan.
  • Going to school. Getting an education to help increase your income and provide for your family is always a good idea. But it is expensive – and you may not qualify for a student loan if you have poor credit.
  • Getting a cell phone. Cell phone companies may deny you service if you do not have good credit. Or they will ask for a deposit from you before you get the phone.
  • Utility hook-ups. Speaking of deposits, have you ever tried to get utilities (such as power or gas) hooked up without a good credit history? Moving is expensive enough without having to put out even more money for a deposit with the utility company.

As you can see, having a good credit rating really is an asset! The great news is that even if you have poor credit today, you can start working towards rebuilding your credit at any time. Make sure you pay your bills on time, and consider getting a secured credit card or a Cash Crunch loan to help rebuild your credit.
Are there any other ways that poor credit costs you? Please comment below and let us know!

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