Everyone knows that bad credit is a bad thing.  But most of us don’t know just how devastating having poor credit really is.  Our credit score affects almost every aspect of our lives.  Obviously, bad credit makes it difficult to get a credit card or buy a home.  Even if you can find a lender who will finance you, the interest rate you will pay is just short of what you would find with a loan shark.  There are many ways that bad credit scores can hurt you.

If you are looking for a job or trying to get promoted many companies are now routinely checking credit scores.  They take the stance that someone with bad credit is irresponsible and who wants that kind of person handling their business affairs.  If there are two employees competing for the same position in a company, if one has bad credit and one has good credit, who do you think is going to get the promotion?
If you have credit card debt and you decide to always pay one on time while neglecting your other cards, guess what?  Through the concept of “universal default,” credit card companies can raise your rates even if you pay their card on time.

The premiums you pay for car insurance are affected as well.  Most insurance companies now perform credit checks on their customers.  Their data proves that statistically, people who have good credit get in less car accidents, and therefore deserve a better rate.

If you try to rent an apartment with bad credit you may find that difficult as well.  Many landlords now make it a practice to check the credit of prospective tenants.  It makes sense that someone who pays the bills on time will be more likely to pay their rent on time.

It may even be difficult to even get a checking account as banks use credit checks to offset the risk of customers who may bounce checks.

In addition to these situations, if you are not paying your bills when you are supposed to and your credit is bad it is only going to get worse.  You will have to deal with the persistent and annoying calls and letters of debt collectors.  There are many out there who are afraid to answer the phone for fear of having to deal with collectors.

Another consequence of having bad credit and not paying your bills is having your paycheck garnished.  The lenders can recoup some of the money owed to them by getting a court order to collect a portion of your paycheck before you even see your paycheck.  Not only does this wreak havoc on your budget, if you have a budget, and if you are in this situation you probably don’t, you have to face the embarrassment that your employer now knows that you are a deadbeat.

The lesson here is simple.  Don’t get into debt you can’t afford and when you do make sure you pay your bill promptly.