How to Face the Challenges of Bad Credit
By TLB Contributing Writer: Brett
We all make mistakes. Unfortunately, bad credit is one of those mistakes that tend to linger. You can’t escape a bad credit record and in the US it can make living more difficult than it needs to be. But you can still live with bad credit. If you haven’t yet repaired your credit score this is how you can get along even with a low number.
How Can I Get a Job?
Many employers have started to run credit checks. Some companies will even refuse to hire an employee if they have a bad credit score. Thankfully, this is not as regular as you might think. It’s also the case that many employers will hire exceptional candidates even with a bad credit score.
The key is to not panic and acknowledge your mistakes. Don’t try to back away from it or lie. Most employers will appreciate the honesty.
How Can I Rent an Apartment?
The issue of trying to rent an apartment with bad credit has been blown out of proportion over the years. The fact is few landlords will actively deny potential tenants because they have a bad credit. But they will certainly punish you for it.
The main way in which landlords approach the situation is by charging a higher security deposit. For example, someone with good credit may pay a half month’s rent as a deposit. Someone with bad credit may pay a full month’s rent. In extreme cases, you may be asked to have a co-signer. Make sure you prepare for this possibility. There’s usually no getting around it.
How Do I Get Wi-Fi and Data Plans?
One of the biggest changes in the last few years is that wireless providers have started to ask for credit checks. They will ask for deposits in the event of a low credit score. This can be as much as $500 if you have a low credit score. Unfortunately, there’s no way around this.
The best alternative if you have a low credit score is to opt for a prepaid plan. These plans are better than they used to be and more affordable.
How Do I Borrow Money?
First of all, you already have a bad credit score because you borrowed too much money in the first place. Resist borrowing any more money if you can’t afford it. The only time you should borrow money is so you can repair your credit score. The problem is lenders like to prey upon those with low credit scores. It gives them the chance to charge absurdly high rates. And since the lending industry isn’t well-regulated this can leave you vulnerable.
There are a places you can find when you need a loan with bad credit. To start with, you can approach a lender that specifically targets bad credit scores with bad credit cards. These have much lower limits and higher interest rates, but they’re good for rebuilding scores.
If you have your finances under control and are trying to start a business, you can have an uphill battle. Many of the startup cost and business relationships will require credit checks. This might include leases, lines of credit and initial loans. It’s not impossible to start a business with bad credit but you will have extra obstacles.
What’s the Best Way to Live with Bad Credit?
Bad credit is always going to hurt you, especially in the US. The best option is to avoid living with it and to begin repairing your credit score. Doing practically everything will be cheaper and you’ll have far more options open to you.
Pay down your debts. Then you can start consolidating others. As you get rid of your balances you can begin to start borrowing small amounts again. Pay them back on time and over the course of months and years you’ll start to improve your score.
Last Word – Be Aware of Your Credit Score
It’s perfectly possible to live with a negative credit record. However, it’s far from an easy life and you should avoid it where possible. You’ll constantly have to pay upfront and deposits on practically everything and it will be much higher than you would like.
But if you improve your credit score by just a few points you’ll be able to borrow more, reduce security deposits, and live a much easier life. It all starts with getting a copy of your credit record and forming a plan.
Do you have any tips for improving your credit score in a short amount of time?
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