How Credit Affects You?

Your credit score may look like a harmless three-digit number, but don’t be fooled. A good credit score can be your ticket to the best interest rates whenever you borrow money. A bad credit score, on the other hand can hurt you in many different ways.

What Is "Bad Credit?"

Many people who have bad credit often find themselves in difficult situations financially. But what exactly does it mean to have "bad credit," "blemished credit," or "less-than-perfect credit?" Well, it can mean a few things. A person can have bad credit from not paying their credit card bills or monthly mortgage payments on time or missing them altogether.
It may be that you shared an account or two with your spouse who had bad borrowing habits which affected your credit. Or it could be that you've gone through a bankruptcy or foreclosure process.
Your credit score is affected by numerous things such as whether you pay your bills on time, whether or not you borrow a lot of money from numerous accounts, the amount of time you've been borrowing, and the types of credit you're using (eg. auto loan, mortgage, credit cards, etc.) The more negative marks you have on your credit report (such as late payments, bankruptcies, etc.), the lower your credit score.

How Can Having Bad Credit Hurt You?

Having a poor credit history or a low credit score can seriously affect you financially. One of the things that can happen is that you could be denied credit. A low credit score indicates to lenders that you are a high-risk borrower and they may not be willing to lend you money.

How to Improve Your Credit Score

Having poor credit is an uncomfortable subject for many. And in order to do something about it, you have to first acknowledge the problem. Don't lose yourself in a sense of denial. Once you accept that you're having difficulty, it's easier to take steps to improve your situation.
If you do nothing else, the most important thing you can do to improve your credit score is join NCR Credit Buillding Program. We present each client with a specific action plan, where we advise specific / personalized credit strategies that you can utilize to maximize a strong, healthy credit profile. We will structure a plan that will consist of deleting negative items as well as establishing new lines of credit.

What happens when you apply for credit.
When you apply for credit, you authorize the lender to ask for a copy of your credit report. This is how voluntary inquiries appear on your credit report.
The inquiries section of your credit report contains a list of everyone who accessed your credit report within the last two years. The report you see lists both voluntary inquiries, spurred by your own requests for credit, and involuntary inquiries, such as when lenders order your credit report to offer you a pre-approved credit card.

Here are some of the areas where bad credit can affect you:


Mortgages

If you have a credit score of 720 and above, you will likely be able to receive a lender’s best rate on a mortgage or home equity loan. Between 675 and 719 you could end up having to pay up to half a percentage more than someone in the top category. Between 620 and 674, you may need to provide more documentation than those with higher scores and could end up paying as much as 2 percent more than borrowers with excellent credit. Below 620 you’re considered “sub-prime” meaning that you are considered to have less-than-perfect credit and it may be more difficult for you to find a lender. You could also be charged rates up to 3.5 percent higher than a lender’s best rate, which could mean tens of thousands of dollars in additional interest over the life of your mortgage.


Credit cards

It’s almost impossible to do without a credit card in today’s economy. Unfortunately, credit cards often carry relatively high interest rates (18 percent is not uncommon). Cards issued by financial institutions, may offer a scale of rates for different cardholders. If you have excellent credit, you can often get a major credit card with a rate of less than 10 percent. With a poor score, however, you may be stuck with a rate that’s twice as high. However we can assist you with obtaining Credit Cards, visit apply for Credit Cards on our menu or call and speak to a representative.


Consumer loans

Bad credit will likely result in you paying a higher rate for your car loan, unsecured line of credit and most other types of consumer loans. There are too many variables here to provide exact numbers, but the above guidelines for mortgages demonstrate how interest rates can increase for people with low credit scores.


Insurance

Insurance companies in many states use credit scores to help them set your homeowner's and auto premiums. They argue that people with low credit scores are statistically more likely to make claims, so no matter how careful you may be behind the wheel or in your home, bad credit may result in your having to pay more than other people with similar vehicles and property.


Employment

Under U.S. law, prospective employers are generally allowed to investigate your credit report in order to help decide whether or not to hire you for a particular position. Laws vary by state but, in general, they are required to obtain your written consent in order to do this. While you may refuse, there is always the chance you may not be hired. Obviously, a low score could potentially be an obstacle to getting a job.


Other areas

A poor credit score can affect other areas of your life that you’ve probably never considered. For example, landlords can check your score (with your consent) before renting an apartment, and utility,phone companies may require customers with bad credit to pay a deposit when opening a new account.

You can’t repair bad credit overnight, but you can gradually improve your score if you commit to changing your habits. The long-term financial payoff that you receive will make it well worthwhile. Call NCR Credit Plus 866 469 6599