We can’t deny that money is an essential part of our lives and we can buy what we need with it. Not only can we support others with it, we can even fund our future with money. But it is sad enough to note that there are a number of bad financial habits which can spoil your financial well-being once and for all. Although such habits won’t destroy your finances then and there but with time we may see that we are drowning in a dire financial situation with very less hope of recovery.
Bad credit is one such thing which has a detrimental impact on our daily life. What are things that get affected due to bad credit? Not being able to make your payments on time will lead to bad credit and this can keep you from achieving many things in life. Let’s take a quick glance at what they are.
- Bad credit affects your relationships
Although this can’t be applicable for all, yet this depends on who you’re speaking to. Credit health definitely matters when people are concerned about settling down with long-term business and romantic partnerships. There are lot of people who become credit-oriented when they date their partners and this is when having a good credit score can have a positive impact on your romantic relationship. Good management of finances gives a positive impression of you as a person.
- Access to a bank account
Though banks typically take a look at your banking history, there are some banks which will also evaluate your credit report apart from your banking history. The bankers will definitely check what is there on your credit report to get an idea of how you’ve been with handling your finances and how you can easily open a new bank account.
- Prices of insurance policies will matter
Insurance policies, especially the auto and home insurance policies usually rely on something that is called the insurance score. This is a metric which links up your credit score to your insurability or the risk to your insurer. No, that doesn’t mean that poor credit scores will bar you from getting an insurance policy but they will definitely keep your premiums higher than average. Hence it is vital to maintain a good credit score by making timely payments to reduce the cost of insurance premiums.
- Achieving a housing loan or a mortgage
Besides the necessary immediacy of having a good credit score for getting a home, mortgage lenders even take a close look at your credit score before deciding the mortgage loan amount. Not only does the landlord check your score but the loan lender too will check the 3-digit number apart from your DTI ratio. If you wish to get a mortgage loan with ease, make sure you maintain a good score.
Therefore, if you wish to get on top of your finances and grab loans with a reasonable interest rate, make sure you have a good credit score.