Credit Effects

How a Low Credit Score Can Hurt You

A credit score may seem like an arbitrary number, calculated by an invisible credit agency with no real bearing on your life. However, bad credit can cost your real money. To get an idea of just how much money you can lose due to bad credit, take a look at the following examples.

Credit Cards

If you have a low credit score, you will not be eligible for prime credit cards. These cards have the best interest rates, payment terms and credit limits, making it easier for you to maintain good payment history, thus further establishing good credit. Consumers with less then stellar credit can only qualify for less attractive credit cards or “sub-prime” cards. These cards often have higher interest rates, monthly fees, lower credit lines, and even cash deposits. In many cases, these cards make it difficult to maintain a positive payment record and often fail to report your positive credit activity to the credit bureaus. A sub-prime credit card does not only cost you money, but can also make it very difficult for you to improve your score.

Car Loans

When trying to buy a car with bad credit, you will not qualify for the lowest interest rates available. This often translates to thousands of dollars more in interest payments over the life of the loan. This additional interest will take the form of a slightly higher monthly payment. While it may not seem like a lot in any given month, it can be significant when calculated over the life of the loan.

Home Loans

As you might imagine, the effects of bad credit are most evident the larger the purchase, such as when you are trying to purchase a home. For most people, a home is the largest purchase they will ever make. If you have a poor credit score, you will end up paying thousands of dollars more in interest over the life of the loan.

Other Factors

A low credit score can also translate into higher insurance premiums and hurt your ability to get that new job or promotion.

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  • Financial Renovation Solutions, Inc.
    6401 W. Eldorado Parkway, Suite 122
    McKinney, TX 75070
  • Phone: 1.888.617.6841
Renovating your Credit and your Lifestyle

Financial Renovation Solutions provides comprehensive credit repair services to individuals looking to improve their overall credit profile. We take a comprehensive approach that includes repairing, rebuilding and protecting your credit.

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