A survey conducted by Credit.com found that nearly 40% of millennials don’t know where to obtain their credit reports. Checking your report regularly is the best way to ensure that your finances are healthy and that your overall credit remains in good standing. Poor credit can negatively affect your life in many ways. Stay on top of your credit to avoid the following negative consequences of poor credit.
Higher Interest Rates
Individuals with lower credit scores and negative listings on their credit report will incur higher interest rates on new lines of credit.
Credit Application Denial
Poor credit can also result in loan application denial. Lenders will view you as a high risk borrower and are less likely to approve your application. This could mean you’ll have more difficulty purchasing a home or vehicle.
Difficulty Finding a Job
It’s becoming more common for potential employers to check an applicant’s credit before making a final hiring decision. This is especially common for jobs within banking and financial services, government, or jobs that require security clearance. Employment screening reports are also often used for trucking, nursing, food, and retail positions. Employers are required to provide you with report details if you’re denied a position as a result of the report.
Rental Application Denial
A lower credit score is likely to make it more difficult to rent an apartment. Landlords want to see that you can make payments on time. Poor credit can be a red flag that makes them less likely to rent to you.
Higher Utility Bills
A person with lower credit may experience higher utility bills than someone whose credit is in good standing. It can also make it more difficult to negotiate a cell phone contract, or result in a more expensive contract.
Debt Collection Contact
Negative credit listings are typically the result of late payments or accounts in default. When someone doesn’t make payments for 60 to 90 days, the account may be sent to a debt collector. Debt collection contact can be overwhelming and intimidating and can add stress to your financial situation.
Check Your Report
Be responsible with your finances by making bill payments in full and on time and checking your credit report regularly. You can request your credit report by mail or online at annualcreditreport.com. You’re entitled to one free credit report every 12 months from each of the three credit bureaus.