The need to repair bad credit history

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Credit Card Applications » Research » Guides » Building Credit History » The need to repair bad credit history

The need to repair bad credit history


Updated: December 26, 2012

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Using credit cards without restraint and not making your payments on time may give you a few dollars extra to spend on parties and pubs and many other fun things. However, when the collection agents arrive at your doorstep or you don`t have any balance left on your credit card, it is reality time! Most youngsters, who get credit cards with the intention of building a good credit history, end up spending foolishly and find themselves facing huge debts and a bad credit history. Having a bad credit history is sure to put your financial well being in jeopardy. Here are a few reasons why you should consider fixing your bad credit history.

High interest

People with bad credit don`t stand a chance of getting any credit cards, auto loans or mortgages. Lenders, who are willing to make exceptions, charge very high interest rates. Hence, over a period of time, you will end up paying more interest than you would have if you would have had good credit history.

Denial of employment

If you thought bad credit history would impact just the chances of getting your next credit card or loan, you are in for a surprise. Bad credit will also impact the chances of you landing your next job. Prospective employers are now taking a look at credit history of potential candidate before offering them a letter of employment.

Lack of cell phone contract

Before issuing a contract to you, cell phone companies are now looking into the credit history of the person. They establish the credibility and reliability of the person based on this report. If you have a bad credit history, you may have to settle for a prepaid cell phone service.

Increased premiums

Just like every industry in the market today, even the insurance providers take a look at the credit report of the person before issuing a policy in their name. A poor credit score would imply rejection of the insurance policy. Even if the companies agree to provide a policy, it will be at higher premiums.

Security deposits

Getting cable, phone and electricity connections will also prove to be a concern if you have a tarnished credit report. You may be denied the connection and those companies willing to give you the connection may ask you for a security deposit.

In addition to these, there are many other repercussions of having a bad credit history. It is imperative to take the bull by the horns and tighten the leash before things get out of hand.

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