With bad credit it is very difficult for people to find loans, cash advances or get approved for credit cards. They may often sell their properties such as their home, land, automobiles, and jewelers to raise cash out of it. Apart from selling property, bad credit will also have an adverse effect on financial future.
• Higher interest rates: This is the most obvious way, a bad credit score effects credit card loans. The person taking out a loan with bad credit will end up paying a lot on higher on interest rates.
• Loans: Financing with loans could be very difficult especially for the people in bad credit. There are many factors that will have a negative impact on your credit scores such as bankruptcy, several outstanding bills, high amounts of debt, etc. All this will result in a significant denting of your loan application because of bad credit, lenders think that the borrower is a high risk client and they may not approve your application.
• Denial of employment opportunities: Some finance industries and organisations consider a credit check to avail employment opportunities and this is the common deciding factor whether the applicant is eligible to receive new job opportunities or can receive other privileges in an organisation. Often people with bad credit will be denied access to some employment opportunities.
• Premiums: Almost every insurance company checks credit history; they impose higher premiums to the people with lower credit or those with a bad credit score. These premiums could be auto, health insurance, or life insurance.
• Higher utility payment: Utilities companies, too, check your credit report for the bill payments, for example this payment could be your phone, electricity, television, internet bill, etc. these companies typically ask for higher security deposits from someone with a bad credit score.
Many people consider selling their property as one of the better solutions to finance their urgent needs or to produce cash flow. But for these people assets like their home or car don’t generate immediate cash flow since they may owe these assets; sometimes debts may take away its value, so it is important to maintain a positive cash flow in order to ensure the value of the assets you owe.
Before you think of selling your assets you must realise their potential value in the current market. You must make sure to expand the potential value of your financial assets. If necessary take advice from financial professionals who will let you know the various programming procedures to improve the value of your assets.
Instead of selling your assets for every urgent need, especially when you’re in bad credit, take payday loans to finance your emergency situation. These are the short-term loans; even people with bad credit can get cash advances. These loans are specifically designed to meet your financial emergencies.
About the Author:
This guest post was written by Katie, a tech writer from UK who is into Finance. Payday loans are instant loans which are helpful when you run short of funds. Catch her @financeport.