Mostly, people refrain from availing credits because they believe living with credits is a burden. While this is true, availing credits has its own advantages. One of these advantages is that you get serious income tax benefits if you have some credit. Also, you will be able to afford what you cannot at once.
Also, even if you don’t have a credit, no one can predict when you may need one. Maybe you lose your job or buy a new car – the reasons may be many. But there is one thing that you need to note. It is not a bad thing to borrow some money but it is a bad idea to have bad credit. Bad credit affects most of the aspects of your life. In this article are a few ways how. For further information, you can look at this now.
How do I Earnbad credit?
A credit is an indicator of how trustworthy a person is when it comes to forwarding credits. It includes various aspects like the regularity of the repayment of the credits in any previous loans, the total amount you owe someone (including the mortgages, credit cards, etc. and also the duration of each loan. Usually, out of 800, scores below 579 are considered bad credit and 61% of people in this bracket are more likely to default on their loan.
Each time you postpone the monthly EMIs, you lose your credit score, making your credit worse.
What effects will it result in?
Having bad credit score means that your future lender will think twice before forwarding loans to you. This may also result in the following circumstances.
#1 No loan approval or loans at a higher rate of interest
Your future loans will either not be approved at all or approved at a higher rate of interest. You will think of quitting your plan of starting your startup.
Nowadays most employers look into the credit history of their prospective employees. Bad credit might mean lower packages and the inability to quit the job that you are not interested in.
Even insurance companies are not left behind when it comes to credit checking. Bad credit history might increase your premiums (many companies do that, though not all) or reduce your returns.
So, these were the ways in which bad credit hurts your budget and life. For more information, you can look at this now. All the Best!!