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7 Damaging side effects of a bad credit score

We make large purchases against our credit cards and become one inch closer to maxing out. However, we do not realize the negative effect this activity has on our credit score. Mounting debt and not making payments on time can damage your credit score to an extent where credit repair is irreversible.

You can face negative repercussions when it comes to having a bad credit score. Poor borrowing habits and not paying off debt on time make it a lot tougher for you to apply for future loans.

If you have a credit score lower than 750, you won’t be eligible to sign a phone contract with a network service provider.

Damaging side effects of a bad credit score

The creditors usually do not care about your purchasing habits. They only want to recover the amount that they had lent you, with the interest.

With a less than 750 credit score, you have great credit risk. Therefore, you would have difficulty obtaining favorable conditions on a student loan or a phone contract.

However, there’s more to it than not enjoying favorable terms on a personal loan. Here are the following damaging side effects of having a bad credit score:

 High-interest rates on credit cards and loans

Your credit score indicates your dependency on the credit card to repay the loan with interest. So, having a low credit card indicates that you are a risk as compared to others with good credit scores.

You see, lenders and creditors charge you financially by imposing interest on the borrowed money. You would get a high-interest rate if you have a bad credit score. Moreover, a bad credit score often puts a limit on how much you can lend from your creditor.

Your loan and credit card applications might not be approved

Many people do not realize that many lenders and creditors double-check the credit history, income, and existing debts before approving a personal loan or another credit card.

Yes, creditors are willing to accept risk but if your credit risk is higher, they would avoid getting in this mess. With a low credit score, you can expect every lender to reject your applications.

You would have difficulty getting approved for a house/apartment

If you are a potential tenant, chances are, your landlord will check your credit score. So, if you have a lower-than-expected credit score, he would definitely think twice before approving the apartment or house lease. He would pass on you and hand over the lease to another potential tenant with a good credit score. We live in an era where every business checks a person’s credit score before engaging.

Landlords are much like banks and insurance companies. They also assume that a person with a poor credit score will not pay the rent on time. To avoid the financial risk as great as this, they only take tenants with a fair credit score.

You would have to pay security deposits on the utilities

All the utility companies (cable, internet, phone, gas, water, and electricity) are among those who will use the bad credit score against you.

With a poor credit score, you have to pay a security deposit ranging from $100 to $300 to establish a general service. Even though you have always paid your utility bills on time, the service companies won’t take the risk.

Moreover, the security deposit that the service companies take will be charged upfront, especially if you are establishing the service in your name.

You would not get a phone contract from a network service provider

Whenever you sign up for network service, the provider checks your credit score. They are giving an extended network service for 30 days. Therefore, they need to know how reliable your payment habit is.

If your credit score is bad, you might have to go with ‘month-to-month or ‘pay-as-you-go’ contracts and that too, with expensive phones.

You might get denied employment

Certain jobs, particularly in the finance or management industry require the employee to maintain a good credit score. If you have outstanding bills, are bankrupt, or have high debts to pay off, you might get turned down.

Employers do not check credit history or your debt history. They do not care about your financial life. However, you can get turned down because this situation can affect your work performance negatively.

It would be challenging to start your venture/business/start-up

Potential entrepreneurs need bank loans to start their businesses. However, having a bad credit score might limit the amount you can lend for your business. Whether the data supports your business’s success or you have a solid plan, it still won’t suffice for the damage your bad credit score would do.


The consequence or damaging side effects of having a bad credit score can be quite extensive and worse than you had imagined. The only way is to get your credit in shape and start all the credit-building practices.

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