Your credit history is extremely important for lenders to feel assured that you will pay them back. As we discussed earlier what are the main factors that affect your credit history now let’s see what are the disadvantages of having a poor credit history.

Rejections

Having a bad credit score does not mean there is not hope for credit but it does hurt your reputation and the financial institutions which maintain a high level of service will not consider you for any credit or loan arrangements unless you show them a good credit score.

Your interest rate will go high

Depending on how bad is your credit score your creditors will impose a higher interest rate as they will consider it risky to offer credit to someone who has a bad credit record. The high interest rates offered on credit cards, personal loans are some of the common examples of having a bad credit history.

Shorter repayment periods

If you have a bad credit then your creditors will not consider you for a loan or credit on a longer term, due to the risk involved in lending credit and uncertainty of getting the repayments from you.

Credit limits will freeze

Often your bank will no longer allow you to have more credit available on your credit card or even your overdraft limit will be frozen until they see an improvement in your credit history.

Frustrations

You will often find yourself faced with annoying situations due to bad credit history, sometimes smaller things such as store credit cards, mobile phone contracts can be rejected based on a bad credit history report.