How Does Poor Credit Rating Affect Your Life?

2007-03-08 10:33:40

( Financial )



How Does Poor Credit Rating Affect Your Life?

Experts say that a poor credit rating can cost you, too much that it may hurt. What is poor credit rating? Credit ratings are records that are used to evaluate your worth in credits. It is the lenders' basis in assessing the amount of debt they will give you. Through credit ratings, lenders are able to evaluate you based on your credit history if you are capable of paying an amount.

A poor credit rating may affect your mortgage and personal loans application. Mortgage loans involve large amount of money. A fraction of a percentage may have a significant difference. Mortgage companies offer lower equity loan rates to people with good credit rating. A 2% difference in the equity rate has a big effect on the total amount you will need to pay.

The same happens with personal loans. There are chances that they will be approved with higher equity loan rates. In addition, insurance companies and car loan lenders may also make use of your credit rating in determining whether you are capable of paying a loan or not.

If you have poor credit rating, do not lose hope. Poor credit rating is not permanent. It may take time to recover your credit score.

You may want to consolidate your loans to be able to make easier payments on your current debts. You may also consult with a debt consolidation service to help you out in determining the right debt consolidation program for you.

You can always check your credit rating on the Internet. This will help you assess yourself and give you the motivation to settle all your debt. Always remember that poor credit rating is curable. As long as you have the determination to improve your credit rating, then it will gradually improve. Make sure to trim down your debts and do not apply for new debts.


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