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What Should You Expect When You Have Bad Credit?


Posted on February 10, 2011

 

They say you never know a good thing until it’s gone and that includes a good credit score. When your credit score drops, your life could change. But, you can better manage the side-effects of a bad credit score when you know what to expect.

Trouble Renting

You might not know to expect it, but landlords check your credit report before they rent to you. Depending on what’s in your credit report, you may get turned down for an apartment. Or, if you’re approved, you may have to pay a higher security deposit to move in than if you have better credit.

It’s hard to tell which apartments do credit checks and which ones don’t. But, you can typically expect big apartment complexes to check credit. Condos and houses owned by individual landlords are less likely to do a credit check. Still, if you can stay put until your credit improves, you’ll have a better chance at getting approved.

Higher Security Deposits

If you do move somewhere else and you have to establish new utilities in your name, you may have to pay a higher security deposit. Utility companies like those that provide electricity, water, sewer, and cable, often run a credit check in the application process. Applicants with bad credit often have to pay an upfront deposit. Usually the deposit can be refunded or credited to your account after a certain number of timely payments, but be ready to pay the money upfront to get your services turned on.

Fewer Cell Phone Options

Cell phone providers are among the growing number of businesses that check credit before they give you service. If you have good credit, you could qualify for one of the plans that allows you to pay for the month after you receive them. However, customers that have bad credit often have to pay a month ahead for their cell phone services. If you miss a month’s payment, your cell phone would be turned off. It helps in a way because you never get behind on your bill, but if you’re under a contract you have to pay eventually or you’ll face early termination fees.

Some cell phone companies also penalize customers to have bad credit by requiring them to pay a higher security deposit or pay full price for the cell phone.

Employment Difficulties

Certain employers check credit before they’ll give you a job. Unfortunately, this means you could be turned down for a job if you have bad credit. You’re not immune to the effects of bad credit just because you’re already employed. Your current employer might check your credit if you’re up for a promotion or a raise. That’s something to be aware of.

Living With Bad Credit

You can survive if you have bad credit. You can even live well if you have bad credit. The key is knowing when your credit is going to affect you. Be ready to pay an increased cost for certain products and services and don’t be afraid to go without certain things until your credit improves.

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