How Your Bad Credit Actually Affects Your Life

People actually break off engagements after finding out their beloved has bad credit (forbes.com). And I thought having a bad credit score just meant crappy interest rates and no more credit card offers. Hmmm... turns out, there are lots of ways that your credit score can actually come back to haunt you.

When you get married, your sgnificant other takes on your debt and shares it with you. But guess what happens when you divorce? Your bad credit score can actually affect how much of your acquired assets you get to keep. This means, the worse your credit score, the less of your shared things you can keep when you divorce. Yikes.

I have been turned down for a job and also for an apartment because of my bad credit. Banks and credit unions or loan companies can turn you down for a job because of your bad credit, and a potential landlord can refuse you because of your bad credit score as well. You can get around the rent by having a responsible (good credit) roommate who is head of a lease, but you can kiss some jobs goodbye if they require a credit report before they will hire you.

While denying car insurance or charging more for car insurance due to bad credit is illegal in some states, it's not that way for many of them. You can (and often will) be denied car insurance if you have ever been delinquent with a car insurance company or have bad credit. Luckily, a year or so of on-time payments can lower your car insurance rates if they are high at first due to your bad credit.

Homeowner insurance tends to be higher for those with bad credit because they tend to file more claims than people with better credit do. This means you are more likely to have higher rates than someone with decent credit. If you combine your car and homeowner insurance, however, you can get a great deal on both.

What sucks the most about having bad credit is trying to put utilities in your own name. Forget having a cell phone account, since they make you pay crazy deposits. Same goes for electricity or cable. Since you need these things to live comfortably, you'll have to pay your deposit or go without running water. I paid $200 once as a deposit for electricity, and you only get that deposit back if you move to an area outside the service.

While it's not guaranteed that your bad credit can come back to haunt you, odds are, in some way or another it will. You can work on repairing your bad credit simply by paying off smaller debts that show your integrity, and in not incurring any more debt by not paying for things.

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negative experience with bad credit

forbes.com