Poor Credit Status

Your poor credit status, is it costing you more than you think? You may have developed a life style where you do not care about your credit score and rightly so many have become disheartened with it all in this poor economy.

If you have become accustomed to paying cash why would you need a credit score in good order. Alarmingly true many more people, businesses and industries are using that score to make some sort of assumption about you.


Twenty years ago or so that score was exclusively used to extend a mortgage. That was it.


Not so anymore. Since those times many more industries have started using that score. First was probably the automobile industry. The cost of a new automobile has increased steadily and it has gained the importance of being a major purchase one that is only topped by real estate. This kind of purchase can have some very long term effects if purchased new.


When one is calculating the cost of their poor credit status it is normally expected that it will hurt your efforts to....

• remortgage
• obtain any mortgage
• a decent rate of interest

The best rates are now being held out to those with scores of 720 or more.


And it is usually a given that a poor credit will also hurt you if you are still a major player in the credit game with credit cards.

Many times the instances that led to you receiving a poor credit status will be the tip off to credit card companies to use that same criteria to hike up your rates. Even if that doesn't happen the amount of money that they are willing to extend to you will be lowered. The same will be true any time you try to take out a loan of any sort.

Other areas that a poor credit status will hurt

EMPLOYMENT

In more recent times many employers may try to use your score to evaluate what type of employee you will be.

Though they do need your permission first to obtain it.


When you are pursuing new employment, if it were in the financial field this action would be warranted.Who would want a financial adviser that can not keep his own finances in check?

More and more though this action of checking a persons credit as a condition for employment for all sorts of job types is disturbing.


The thinking used many times is that financial problems at home may have a detrimental effect on job performance. If you are applying for a management position and your management of financial affairs does not seem to be in order how well qualified are you for that position?

Though this may seem like logical reasoning, is it fair? Not all our financial situations are in our full control, so using our credit score to make these assumptions about a person is not justified.


Consider too, how much information is inaccurate and missing from our credit reports. Yet this practice remains legal at this time and becoming more and more of a standard practice.(Along with searching for a face book profile!!)

INSURANCE

Yet another area of concern when a person has a poor credit status is when you are trying to acquire insurance. The credit score is part of the criteria used to set the rate you pay. In health insurance and possibly life insurance a poor credit status can say that you may be under much stress and therefore more of a health risk.


With car insurance and homeowner insurance there is the current belief that those with a poor credit status will file more claims. If your score is low than your premium is going to be higher than what others with a good credit score will pay.

CELL PHONES

One situation that a poor credit status affects and most all people know will be when trying to open a new cell phone account.
You may already have an account but if that carrier doesn't treat you right and you decide you want to change, if you haven't kept that credit score on the up and up you may have a problem.It could be a big problem if you act hastily and don't check what your options are first. Those with a busy lifestyle or worse a busy work schedule with phone on the run work will suffer!

HOUSING AND UTILITIES

Another in the growing list of troubles a poor credit status can give you is the difficulty one may have getting approved for an apartment. Mostly this would be with one that has many amenities or any that require signing a yearly lease.


This may not be as much as a problem lately as the luxury apartments seem to be having a hard time keeping people in them. As well as the fact that during this difficult financial time many are not willing to sign a lengthy lease term (ON Both sides).


No one wants to get trapped in a lease that they will not be able to fulfill terms with the unstable job situation and landlords don't want to bother with a situation that needs court time to enforce.


Somewhere in the future though,our economy may get better and you may find yourself in this situation. A credit score even in this economy can still sway who to award an apartment to when there may be many looking for the same unit you desire. So if this is an important aspect in your life it's something to think about.



If the misery of dealing with being qualified for a new apartment alone wasn't enough when you have a poor credit status then comes the problems trying to start a new utility service.


If you are not already known by the company and perhaps even if you are known, a poor credit status opens up the door for that company to require a somewhat sizable chunk of cash as a deposit to start your service.


This can hurt if you are not expecting it and already put a wad of cash down to get into an apartment!!


This was once only done with businesses now residential services are getting slapped with this abusive practice.




Speaking of abusive practices, that's all this seems to be, an abuse of the credit system in order for companies to beat more money out of you.(Isn't that the USUAL)??


Till legislation is passed to protect consumers from this, your best protection is to repair your credit as best as you can and limit what those can do to you.