What will a bad credit rating stop me from doing?
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Every single move you make regarding your credit has some sort of consequence. If you make your payments on time, your credit providers will report positive marks on your credit file. If you make late payments, they will do the same. If you have a bankruptcy, you will find that on your credit file as well. However, your bankruptcy will remain there for seven years, whereas your defaults will remain on your credit file for five years.
Even when you fill out a credit application and the credit provider enquires on your credit, that enquiry remains on your credit file for five years if an account is not opened. These enquiries also show potential creditors how much credit you are applying for at the time. If you have multiple enquiries, this tells them that you are applying for a large amount of credit at the time. This makes them weary of whether or not to extend credit to you.
If a creditor is unable to reach you and they have exhausted all means of contact, that is called a "clearout" and that also remains on your credit file for a period of seven years.
As you can see, there is not much that you can do that will not find its way onto your credit file. Even writs and summons will remain on your file for a period of four years.
When all of this translates into a bad credit rating, you will find that there are many things you cannot do. For example, you will not be able to acquire new credit. If you do, then there are certain consequences that come with that new credit. Your interest rate may be higher and you may have to pay a lot of fees just to have the credit.
But this not only reflects upon your ability to acquire new credit. You may also find that it can affect your ability to find a new job. Anytime you are asked on a job application if your credit file can be checked, you can bet that they are going to look to see what sort of individual you are on paper. However, they can usually tell if you fell upon hard times, but it also depends on whether or not you have recently shown that you are trying to dig yourself out of that hole through on time payments.
You may also find it difficult to find a place to rent. Landlords will also look at credit files to ensure that the individual looking to rent from them is not someone who has not paid their rent in the past. They also look to see if there are any judgments against you and what those judgments are if there are any.
So your credit rating plays an incredible role in your life. If you miss a utility bill payment, a credit card payment, a loan payment, or you don't pay your rent, all of this can show and severely hamper your life.
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