Disadvantages of Having Low Credit Rating

Your credit rating is highly important because it determines your overall credit worthiness. Depending on your score, you can either get that loan you have so desired—be it a house loan or car loan—or get denied by lenders. As such, it is a must that you take good care of it and keep it a high level as much as possible. Low credit rating can have an adverse effect on you and you will definitely miss a lot of luxuries in life if this is your case. Below are some of the disadvantages of having low credit rating:

• Creditors see you as a risk. The lower your score is, the higher you will be considered a risk. When creditors look at your credit report and they see a low score, they may deny your application for loans or credit cards. If they do, they will most likely give you high interest rates, which will not be of help to you. 
• It will be extremely hard for you to get your loan or credit card applications approved. It is easy for those with excellent credit to find and get a new credit card. Most companies are willing to dole out new accounts to people with reliable payment history. This is not the case for people with low credit scores. If you have a low score, lenders may not be willing to take a risk on you. As such, they will likely deny your application.
• A lot of landlords will turn their backs from you. Some landlords may ask to see your credit history to check if you could be trusted to pay your lease on time. As such, with a low rating, you may find it hard to find landlords that will take you in. Therefore, finding an apartment will definitely be a big challenge for you unless you have good credit history. Fortunately, there are still some landlords that may not ask about your credit standing, but it may be hard to find them nowadays.  
• Your prospective employer may not hire you. Even if you have a fantastic resume, some employers may consider your credit history before they hire you. If they find that your score is less than favorable, they may view you as a risk as well. There are employers that base their decisions on how an individual handles his credit. For them, if you can’t manage your credit, how much more your job? 
• You may be compelled to place a security deposit on utilities. Many electric and phone companies are now taking credit history into account. People with bad credit rating may be obliged to pay a deposit so that they can use the service. This is applicable even if you pay all your utility bills on time. 
• Cell phone companies will turn you down. Cell phone companies use credit history to determine whether they can rely on you to make payments. If you have bad rating, you may have to use a prepaid phone, look for another company that may consider your situation, or live without a cell phone. 
• You will receive nonstop calls from debt collectors. People with bad credit may have past due bills. If you do, there is a huge chance that debt collectors will call your home and office phones day and night to get the money you owe.

The good news here is that these difficulties can be avoided. The key is to keep your rating high. Don’t ignore your bills and make it a point to pay them on time to never incur interest. Your good credit behavior will pay off in the long run. If it can't be helped and you are already finding it hard to pay all your bills, you might want to consider getting some help, like getting a secured balance transfer card, which you can use to slowly establish a good credit score.