Follow Patrick Linkedin Facebook
Email Patrick Email
Financial
Aug 31, 2017

Six Ways Bad Credit Can Ruin Your Life

Sponsored Content provided by Patrick Stoy - Mortgage Consultant/Owner, Market Consulting Mortgage

Okay, using the word, “ruin,” in terms of what a bad credit score can do to your life may be a bit of an overstatement. 

It is probably more accurate to say that bad credit can produce a nasty hiccup, necessitate a detour or a create a pothole on the road of life.

The subject came up recently when I was talking with an older friend of mine, a homeowner with several investment properties, a vacation home and a number of classic cars that were all purchased with cash. She had a simple question – Why should I care whether I have good credit? I am definitely not trying to buy any more property.

Most people understand that there is a need for a good credit score if seeking to obtain financing for a home. This is a situation in which having bad credit could cost you thousands, or even tens of thousands, of dollars. Rest assured that lenders will thoroughly review your credit score and credit history during the mortgage application process. The worst-case scenario is your application for a loan could be denied if you have poor credit.

The other ways bad credit can seriously impede your quality of life and drastically reduce your ability to be financially solvent are not quite as obvious. 

The list below contains a number of items that can get pricey or unattainable if your credit is less than positive:

  • Credit cards – Interest rates on credit cards can range between seven and 36 percent. A good credit score can land you anywhere from 10 to 19 percent. With a bad credit score, the baseline interest rate can start at 22 percent and go up from there. This can make a huge impact, especially if you carry a balance.
  • Car insurance – It is a surprise for many people to learn that insurance carriers in 47 states review an applicant’s credit score before deciding on a rate. The result is that you could have higher-than-average rates for years to come. Certain carriers may not even approve you for insurance coverage at all if your credit score is extremely low.
  • Searching for employment – Believe it or not, it is legal for a potential boss to analyze your credit report, as long as you approve it in writing. This type of information can be used for the basis of making decisions about hiring, and it’s permissible under the Fair Credit Reporting Act. After all, many types of employers - such as banks, jewelry stores, credit card companies, etc. - face a significant amount of risk from theft, so it is easy to see their logic in deeming a candidate unworthy because of items on a credit report. However, some states have laws that limit the use of credit information in the hiring process.
  • Cell phone plans – Similar to car insurance providers, cell phone companies will check your credit prior to activating their service. If you have poor credit, it’s possible you will pay more each month for a phone or plan.
  • Car loans – Without a good credit score, it may be difficult to secure financing for a car. Those who are able to get a loan with a bad credit score could end up paying up to two percentage points more than someone with stellar credit.
It is worthwhile to point out that, even if your credit is less than perfect, it may be possible to obtain financing for a home. Also, there are occasionally small issues or discrepancies on a credit report that can be resolved with something as trivial as a phone call. Taking care of these can make an individual’s credit score jump immediately. For a consultation about your ability to secure financing or to obtain a letter of prequalification, give me a call at the number below.

Patrick Stoy (NMLS Numbers 39527 and 39166) has 18 years of mortgage lending experience. Patrick is CEO of Wilmington-based Market Consulting Mortgage, which he started in 2005 with a mission to build lifelong customer relationships by providing real value. To learn more about Marketing Consulting Mortgage, visit www.macmtg.com. Patrick can be reached at [email protected] or 910-509-7105.
 
 

Other Posts from Patrick Stoy

Mcm 14jan insight
Ico insights

INSIGHTS

SPONSORS' CONTENT
Martyheadshot

Go Green With Your IT

Patrick Stoy - Market Consulting Mortgage
Andyolsen 161723521

Trusts As A Tool In Long-term Care Planning

Patrick Stoy - Market Consulting Mortgage
Dave sweyer 300 x 300

What You Should Know About Managing Your Own Rental

Patrick Stoy - Market Consulting Mortgage

Trending News

United Airlines To Offer Two New Non-stop Routes To DC, Chicago

Christina Haley O'Neal - Nov 20, 2017

Virginia-based Insurance Broker Acquires Wilmington Firm

Christina Haley O'Neal - Nov 20, 2017

Steam Restaurant & Bar To Open At Convention Center Hotel

Jessica Maurer - Nov 22, 2017

New Owner Picks Up 3 Wilmington Taxi Companies

Cece Nunn - Nov 21, 2017

ILM Hires Planning And Development Director To Aid Future Growth

Staff Reports - Nov 21, 2017

In The Current Issue

Builder Aims To Create Apartment ‘Gems’

In a shady area surrounded by trees just off South 17th Street, builders found a real estate equivalent to a diamond in the rough. Plantatio...


First-Time Homebuyers Face Challenges

Challenges faced by first-time homebuyers these days in the Wilmington area range from not making enough money to save up for a down payment...


Info Junkie: Joan Loch

Info Junkie Joah Loch, commercial broker with MoMentum companies, on her media and web picks....

Book On Business

The 2017 WilmingtonBiz: Book on Business is an annual publication showcasing the Wilmington region as a center of business.

Order Your Copy Today!


Galleries

Videos

2017 Health Care Heroes
Major Developments
WilmingtonBiz Expo - Key Note Lunch with Keynote Lunch with Chip Mahan - 2016