How Does Bad Credit Affect Your Life?

How Does Bad Credit Affect Your Life?

Credit card debt and bad credit are very common financial problems that we deal with. Your credit score is a number between 301 and 800 that is used to measure your ability to pay money back on time. Lenders and other agencies will use it as a measure of how much they can trust you when they are giving you their money.  Having bad credit can limit your ability to get loans, but it also affects areas of your life you may not expect. 

Difficulty Getting Loans 

When you are in a situation where you do not have good credit, it can be hard to get the loans you need. Getting a loan from a bank or loan agency will most likely require a credit check. If your credit is weak, the likelihood of getting rejected is high. 

This does not mean there are no options available for you. There are short-term and “bad credit” loans that are designed for people who do not have strong credit. In many cases, these loans can help you fix your credit and consolidate your debt. These loans do not require collateral and depending on the lender, can be easily acquired. 

Renting Becomes Difficult 

While you may think bad credit can only hurt your chances of getting loans for buying a house, you would be mistaken. Landlords and leasing agents will most likely be looking at your credit when you are renting a new place to live. Landlords and apartment managers will use your credit as a gauge of how well you pay bills on time and how you can handle your finances. 

There are some ways you can try to negotiate with landlords. You can add a cosigner to your lease, or you can offer to pay a higher security deposit to help ease some worry. This will not guarantee your chances of getting the apartment/home you are looking at. Going in with food credit makes it much easier to secure a rental. 


It may not seem like it would be a factor for employment, but companies can check your credit when they are evaluating you as a candidate. While it has not been shown that bad credit leads to worse job performance, potential employers may run credit checks when they are evaluating you for a position. 

This will most likely be seen when looking for work in financial institutions, but that does not stop any company from taking a look. Companies that do evaluate prospective employees’ credit are less likely to hire a candidate with bad credit. 

Raises the Price of Your Bills 

One area you may not think would be affected is your utility bills. A common side effect of bad credit is people will not trust that you are a responsible person. This includes companies like cell phone providers and utility companies. They may worry about your score, and the ability to pay back the money they would owe them if you used your services. 

This worry will most likely cause them to charge you more for their services than they would someone with good credit. 

High Insurance Costs 

Insurance costs are another major area affected by your credit.

When looking for insurance, when they evaluate their risk for ensuring you, they will take a look at your credit. They will run credit-based insurance scores to figure out how much you should pay for their service. 

Your monthly premium rate will not solely be based on how good your credit score is. Insurance providers do evaluate many other factors to set your rate. That being said, it is common that the worse credit you have, the more you will pay. 


Having bad credit is more than just a number. It impacts your life on a daily basis. It is important to take steps to fix your credit and get to a place where these situations do not impact your life. There are many resources that will provide you with tools and information on how to do so, but it is up to you to make the effort and better your situation. 


Leave a Reply

Your email address will not be published. Required fields are marked *