UNITED STATES—It typically does not hit you what having a poor credit score means until you see raising interest rates, denial of loan applications, or even increased insurance costs, so it’s important to start building your credit now. Failing to can cost you thousands in extra interest over the years. Check out some of the side effects that can happen if you are not careful with your financial obligations.

Unattractive Borrowing Options

Mainstream lenders are less likely to approach you with offers for credit cards and loans which means that you will have to rely on lenders that have a less than clean image to rely on credit options. That means that, even though the same bodies regulate them, they tend to charge higher interest rates because they know whom they are taking on and, as a result, you may end up paying off a much larger amount than what you intended originally. Secondary effects can also have impacts on other areas of financial working, for example insurance premiums, which can make things a little bit more difficult if you are trying to maintain a vehicle for work.

This can spiral out further if you are the CEO or on the Board of Directors of your company, even if it is just a one-man operation because most business credit reference agencies could take into consideration the person who named Director as part of their algorithm. While it can be hard to pinpoint the exact metrics that big lenders use, if they are relying on being fed company data to extrapolate the risk assessment, there is a high predictability that this information is vital to their scoring method.

Difficulty Securing Funds

Trying to out a loan when you do not have the ‘good’ to ‘excellent’ category of credit score is hard, so it is important to consider all your assets and if you are making the most out of the opportunities you have. In this case, a secure home equity loan could be nice option if something happens like your air conditioner breaking down and needing a speedy service. If you need a guide on everything you need to know including top lender options, which are depending on credit score and other factors, then be sure to check them out. Utilities providers will often have a copy of your credit file to reference when you are looking at taking on a new service or looking at a new supplier. It is worth taking that into consideration if you are trying to negotiate a new gas or water rate, especially if they are looking at you as a risk because you have got so many ticks against you on your credit file.

Another area that can be affected by having credit card woes is rental agreements. This can include anything from car rental to a long-term lease on a house because it shows a lack of financial security which can indicate that you aren’t the most responsible person. As a result, lenders may require extra collateral if you try and borrow a car for a set period of time, for example. It’s one of the reasons why, if you have a partner, it’s good to have an open discussion about finances because taking on a partner legally means inheriting their bad debt too.