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There are a number of risks associated with bad credit. When you have a good credit score,
you have access to the best credit cards, loan products, and lower interest rates. When you
have a bad credit rating, you will miss these days, paying more or being declined on
Bad credit makes life difficult in numerous ways, it delays retirement and costs you money
in the long run. Improving your credit rating is possible, but you need a good understanding of
the risks of bad credit.

Risk to Lenders

One of the risks of bad credit is that you are a risk to lenders. Banks do strict credit checks
and affordability checks to ensure that you are able to repay the fast bad credit loan in a timely manner.
With bad credit, you may not qualify for personal loans, online short-term loans, or credit cards.
You may be limited or not eligible at all if you have a bad credit rating for some financial
products, as a result, you may only be eligible for payday loans, loans from title companies, and pawn shops, all come with increased risks.

Loans Will Cost More

When you have a good credit rating, you can apply for a loan with confidence, securing the
best interest rates, as you are considered low risk. When you have a bad credit rating,
while you may be approved, you can expect to pay a significantly higher interest rate,
costing you more over time.

A personal loan, short-term loan, or car finance will come with
higher interest rates, which means the final amount payable is much higher than if you had
a good credit rating from the start. This is why you need to be aware of the interest rates
offered and ensure you are able to make timely repayments on any loan you apply for.

Insurance Premiums

What you may not be aware of is that if you want to pay your insurance on your car or
home in installments, the insurance company will do a credit check first. When you have a
bad credit rating, chances are you will need to pay your insurance in one lump sum, rather
than spreading the cost over a year period. This can be a strain on your cash flow,
especially if you have other debt you are busy repaying.

Career Opportunities

Certain industries will do a credit check on potential employees before offering them
employment, especially when it comes to the role of working with finances. You cannot work
in a bank or manage business accounts if you cannot manage your own money. As a
result, you may find yourself limited to career opportunities if you have a bad credit score.
Your credit score reflects any non-paid debts, late payments, and CCJs. If you want to
push ahead in your career, improving your credit score can help you achieve your career

Renting a Home Can Be Difficult

Most landlords and rental agencies these days require a credit check to ensure you will
pay your rent on time. Some rental agencies are stricter than others. A bad credit rating

can result in you being turned down for your dream home rental. It’s not uncommon for an
increase in deposit or having someone co-sign the lease with you in order to be approved.
Bad credit can make renting a home harder.

You May Not Be Able to Get a Credit Card

Credit card rewards are offered to customers with excellent credit scores. You get the best
offers and cash-back incentives. One of the risks of bad credit is not being able to secure a
credit card or securing a credit card with high-interest rates, which means your monthly
installments are considerably higher to repay any of the money used.


Warning: Late repayment of payday loans can cause you serious money problems. For help, go to