Poor credit is surprisingly common. In 2016, credit bureau Experian revealed that one-third of Americans had a credit score less than 601, which is classed as “poor” or sub-prime. If you fall into this category, you may not be too concerned, but are you aware that a poor credit rating can affect you in several surprising ways?
Employers don’t just check employer references before they offer us a job. Many employers scrutinize social media and some even look at our credit reports. This may seem rather intrusive, but there is a good reason for their sneaky behavior.
If you work in finance or a position of trust where you may have to handle money, it doesn’t look great if you are up to your eyeballs in debt. Sure, this doesn’t mean you are likely to dip your sticky little hand in the petty cash tin, but desperate people do desperate things. There is also the case that if you can’t manage your money, how on earth are you going to manage a stressful job?
“If you’re currently job hunting, or are concerned that your credit report may be used by an employer at some point, it’s never the wrong time to review your credit,” state Creditrepair.com representatives. “First, check that everything is in order in your report, and then take steps to repair your credit if necessary.”
If this sounds like you, Google “repair my credit” and speak to a professional.
A poor credit report is normally preceded by debt. This could be sky-high credit card repayments, huge auto loan payments, and a mortgage you can’t afford to pay. Dealing with debt and juggling numerous creditors is stressful. This will have an inevitable effect on your health, even if you don’t see it at the time.
Insomnia, gastrointestinal problems, frequent illnesses, depression and anxiety: all these are signs of debt-related health problems. Do you flinch each time the telephone rings because you are worried it’s a debt collection agency chasing you over an unpaid loan? Do you find it impossible to sleep at night because the bills are piling up? If so, you need help because stress can kill you.
Unless your kids are teenagers, they won’t have a clue how much debt you have. Nevertheless, a poor credit rating will have an impact on their lives in many ways. For example, if you have a poor credit score, you might not be able to get a cell-phone contract. If you need a loan, your only option might be a payday loan that charges exorbitant interest rates. People with poor credit scores aren’t eligible for affordable mortgages and landlords may turn them down for a rental apartment. All of this has a knock-on effect on your kids’ lives.
Repairing a credit rating is not easy, but it can be done. First, however, you need to tackle the behavior that got you into this mess in the first place. Yes, it’s time to draw up a budget and go on a credit detox.