Being in debt can have numerous consequences, and a decreased credit score is one of them. While most Americans have a good credit score or higher, there are still millions who have low scores.
What are some of the main challenges of having a low credit score?
Your insurance could go up
Insurance companies tend to factor risk into their premiums. Having a low credit score means you are considered higher risk, which results in higher rates.
It can impact your housing situation
If you’re looking to rent, then it’s likely that the landlord will conduct a credit check. Again, this is typically done to assess risk and check how likely it is that rent payments will be missed.
Obtaining a rental property with bad credit is not impossible, but it can be difficult. You may need to pay an increased security property or get someone to cosign the lease agreement.
Some employers check credit
Your credit can also be taken into consideration when applying for certain jobs. If you’re looking to land a job in the financial sector or in the government, your credit report could be a factor.
You can improve your credit score
Fortunately, there are a number of measures that you can take to improve your credit score. Even paying your utility bills in a timely manner can see your score increase within a matter of months. It’s also possible that your reported score is not completely accurate, so it’s always worth carrying out due diligence.
If debt is holding you back, it may benefit you to seek legal guidance and explore your options in further detail.