Nothing puts a bigger strain on a relationship than financial hardship, which means you really don’t want to have to be the one to break it to your partner that the credit loan application for your new pad wasn’t approved because of a previously forgotten unpaid electricity bill.
To avoid letting a bad credit debt affect your future, Celebrity Finance Expert Anthony Bell warns of the pitfalls associated with bad debt and advises on what you can do to avoid it.
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Healthy habits are important; we know that eating well and going for that morning run makes us feel better, yet in living our busy lives we often overlook the importance of actively managing our finances.
Neglecting our financial health has a huge impact on our overall wellbeing, especially if you have a bad credit rating. The alarming fact is that so few of us know our own credit rating, and whether a late credit card payment or something as simple as a missed electricity bill from moving and changing addresses could come back to haunt us!
When it comes to knowing your credit history, ignorance is not bliss. You may not know the impact of how a bad credit has on your life, but if you take a close look, you’ll see that it is likely costing you money, time and even relationships.
The first pain of having a bad credit rating will see you paying higher than average interest rates on your credit cards and loans. Banks in particular see applicants with bad credit ratings as being riskier to lend to, and over time you’ll end up paying more in interest than if you had a better credit rating and paid a lower interest rate.
With housing prices continuing to soar, especially in Brisbane, Sydney and Melbourne, we’re facing the reality of needing to apply for higher loans to purchase property than ever before. A bad credit rating may mean that your credit and loan application may not be approved, or you’ll be faced with paying a higher interest rate compared to those with a good credit rating. The fact that a bad credit rating could cost you tens of thousands of dollars more over the life of the loan means that it’s so important that you speak to a professional who can help you understand your credit history, and the steps you need to take to ensure you maintain a good one.
The best healthy financial habit you can make is to develop and maintain a good credit history. This can only be done by showing your ability to manage your debts effectively. Really, the best way to do this is to spend less than you earn and budget your expenses so that you know what you can afford, what you need to repay, and by when.