What Happens If I get a bad credit Score?

Many people who have bad credit often find themselves in financially difficult situations. But what does it really mean to have ‘bad credit’? Well, it can mean a few things but the negative effects of having bad credit are undeniable. Here is a list of what it means to have bad credit.

High interest rates

If you aren’t denied credit, it may be more expensive for you to gain credit. One of the first things that you might notice is the increasing interest rates for any financial products you are trying to get. You may have to pay more in fees or with a higher interest rate, which will increase your monthly payments.

You are more likely to be rejected from lenders

It is one of the first signs to watch out for. When you apply for credit but get turned down it leaves a ‘footprint’ on your file. A low credit score indicates to lenders that you are a high-risk borrower and they may not be willing to lend you money. If you start applying to lots of other lenders in hopes of getting credit, this will make it harder and harder to apply for any credit at all.

Future employment difficulties

Depending on the kind of job you are looking for and the attitude of your employer, they may not take too kindly to you having a bad credit score or other financial issues, such as having declared bankruptcy or having any CCJs (County Court Judgements).

Mortgage loans

If you’re trying to buy a home, as a first-time buyer or not you will most likely apply for a loan. Regardless of your credit score it is always difficult to get a mortgage but it’s even harder if you have a poor credit score. There are specific types of mortgage loans especially for people with bad credit. Interest rates will be higher on a bad credit mortgage than a standard mortgage and you will probably need a larger deposit of at least 15% or more of the property value.


Gas, electricity, broadband and mobile phone companies are just a few different types of suppliers that require a credit check. British Gas, E.ON and Scottish and Southern Energy, perform credit checks on new customers and whereas energy suppliers can’t refuse those who have a bad credit history, alternatively they can offer a prepayment meter instead of a bill, which is always more expensive. A mobile phone contract doesn’t seem like something you need to apply for but if you are buying a contract a credit check will be done to assess how likely it is you’ll be able to keep up with payments each month. The easiest thing is to get a pay as you go phone and broadband.

You might also have a bad credit score because you’ve never had a loan or a credit card before, and lenders can’t access any evidence to show that you could manage anything borrowed successfully.

Having poor or bad credit may limit your options, but it doesn’t have to be the end of the world. We advise you to find out what your credit score is and what it says on your credit report before applying for any new financial products and take the necessary steps to boost your score if it’s not looking good.