Bad credit is one of the hottest topics around these days. The amount of people talking about bad credit, you would be forgiven for thinking it was the name of the hottest new boy band or the big summer blockbuster in the cinema. Sadly this is not the case and people are not talking about bad credit in an excited or positive manner.

The reason that so many people are talking about bad credit is down to the fact that it can have a hugely negative impact on your life. You may look at your finances in a simplistic manner. If you can afford to buy something, you can buy it and if you can’t afford to buy something, you can’t. This is fair enough for the vast majority of things but there will be things that it is very unlikely that you will be able to pay off in an instant with the money that is in your account.

If you are looking to buy a home or a car, you will find that having a mortgage or a finance agreement in place is essential, so you need to worry about your credit rating. If you have a bad credit rating, you will find it difficult, and maybe even impossible, to make the purchase that you dream of. This can negatively impact on your life and make you feel as though you are getting nowhere.

Bad credit can have a big impact on your life

If this was the total impact that bad credit could have on your life, it would be annoying but not devastating, but these are just some of the issues that can arise through having bad credit. Some of the most common problems people face due to having bad credit include:

  • You pay a higher rate of interest on loans and credit cards
  • You may not be approved for loans and credit cards
  • You may find it difficult to be approved to rent an apartment
  • High interest rates on your credit cards and loans
  • You may be forced to pay a deposit on utilities
  • You may struggle to get a mobile phone contract
  • You may more for insurance
  • You could struggle to set up your own business
  • It could even affect your job chances

With all of these negative aspects associated with bad credit, it is easy to be disheartened. One of the issues with bad credit is that mistakes or decisions you made in the past, which aren’t relevant to you now, could impact on your ability to obtain the funding you need. There is a great opportunity for people to set up their own business these days, but funding is a major issue. It may be that if you have a bad credit rating, the avenues of funding that are open to other entrepreneurs are blocked to you, and this is just one of the ways that a bad credit rating can impact on you.

No credit history is viewed as being bad by lenders

There is also the fact that having no credit history is a negative thing in the eyes of lenders. This is because the company has nothing to judge your ability to pay off finance, which means that even if you have never needed credit in the past, you may find that you are denied the credit you need in the present day.

Given the amount of negative elements and aspects of having a bad credit rating, it makes sense to find solutions that don’t worry about your credit rating. With a guarantor loan, no checks are made on your credit rating, which means you can be a lot more confident about receiving the finance you need. Due to the role played by the guarantor, you will also find that there is a much more attractive rate of APR associated with this style of loan than you would expect from other loans aimed at people with bad credit.

There is also a lot to be said for taking out a guarantor loan and then paying it off on time and in full every month as a way of improving your credit score. Just because your credit score is poor now doesn’t mean that it will always be poor and if you take steps to improve your rating, you may find that finding credit is an awful lot easier in the future.

Andrew Reilly is a freelance writer with a focus on news stories and consumer interest articles. He has been writing professionally for 9 years but has been writing for as long as he can care to remember. When Andrew isn’t sat behind a laptop or researching a story, he will be found watching a gig or a game of football.