Does it even matter to you if you have a lower credit score?
Interest rates continue to climb. Whether that continues is anyone’s guess. Regardless, it makes sense to plan for the potential of higher interest rates hanging out for the foreseeable future.
If you aren’t taking on a lot of new debt, and you don’t have much extra to save, you might think these higher interest rates don’t affect you. You’d be wrong. If you have a lower credit score, then you need to pay attention.
Here are five things you need to know about higher interest rates, and how they can impact you if you have a lower credit score.
Predatory lending can become a bigger problem.
Predatory lenders feed on those with credit score issues. They often charge you higher interest rates for access to their loans anyway, and so you may not even realize you are being taken advantage of.
More interest means you can afford less
You may not be able to afford the loan you need. This could lead you into the hands of predatory lenders (see above). Worse, if you need a loan for transportation or housing, and can’t afford it, you’ll have trouble keeping your current credit score from falling further. It’s a hard cycle to break.
Variable rates can increase your current payments
Some of your current loans may have variable rates. Watch out for credit cards and mortgages. That means the payments can keep rising. If you’re late on one or two payments due to higher dues, your credit score can be affected immediately.
Note: If you’d like to consider consolidating multiple payments into one low-rate loan, ask us about a debt consolidation loan. It could take care of a lot of these issues.
Harder to get loans
If you have a low credit score, then a tough problem could get tougher, especially at larger banks. It helps that smaller folks like the Ashland Community Credit Union don’t just judge you by your number and can make decisions on a person-by-person basis.
Last and not least, higher interest rates are designed to cool off the economy. That means fewer jobs. Don’t be alarmed, but do keep your eye on the trends at work. It pays to know what is happening around you.
Too often, news headlines get lost in the reality of day-to-day life. While the rising interest rates may not make an urgent impact today, they will affect the big picture. If you are working hard to improve your credit score, then the big picture matters.
If you need more information about loan options, especially if you have a lower credit score, give us a call at the Ashland Community Credit Union. We value the person more than the score, and we can work with you toward a helpful solution to your financial needs.