When you use your credit card to buy something you don’t realize the consequences, it might have on your financial condition. You only focus on the good feeling you get when you buy something. But once you cannot pay off your credit card bills, your credit score starts to go down. A bad credit score can affect you in many ways. Here are some consequences of having a bad credit score.
Getting loan can be difficult
We all want to own a house at some point in our lives. If you have a bad credit score, it will be difficult for you to get loans from banks. Besides home loans, we might have to take loans for other purposes as well. A bad credit score won’t help you in getting loans. Even if you get approved for loans, your interest rates will be higher. So, you will have difficulty in paying these loans off. There will also be restrictive terms.
Difficulty in getting job clearance
Though there is not much relationship between employee performance and their credit scores, many employers do a credit check before hiring employees. If you apply for a job in a financial institution or government agencies, then your credit score will be checked.
Difficulty in getting cell phone contract
Credit scores are checked while getting a cell phone contract. They do this because people with bad credit scores are less likely to pay their bills timely.
Higher insurance premium
Good credit score is needed for getting a good insurance premium. If your credit score is bad, then you will have to pay a higher premium for your insurance. This will become an extra burden for you if you own a house and a car.
Bad credit scores can affect relationships as well. You will be losing many opportunities in life if you have a bad credit score. So, try to maintain a decent credit score always.
Many people are talking about the way the real estate market is going to be affected by the Trump administration. This is because the policy platforms that he has been saying during his campaign were vague. These are the impacts we might see.
1. There will be a short-term boost in the economy due to tax cuts and government spending for upgrading the infrastructure of the country. Due to faster GDP growth, inflation may be high. So, the interest rates will increase. If the faster GDP growth sustains then, the inflation can be manageable. There will be more jobs, and so more revenue will come in. If this is only a short-term boost, then the interest rate will climb higher resulting in a budget deficit. So, the generation will be immersed under more debt.
2. The trade deficit will increase. The growing economy will allow the people of America to use more foreign products. If tariffs are increased to lower the trade deficit, then the consumers will face higher prices. If the export and import declines then there will be recession and job cuts.
3. There will be fewer government regulations on the stock market. But there will be restrictive international trade policies. There will be uncertainty in the financial market that will hold back the corporate investment spending decisions.
4. There will be a less regulatory burden on small banks that are good sources of construction and land development loans. This means that small banks will make more loan and increase the home building activity. It will help to overcome the present house shortage situation.
So, we can expect both positive and negative consequences of the policies that the Trump administration will set up. Trump is very experienced in the construction industry. We expect some good things from his government.
Brexit has affected the value of Pound Sterling. The currency fell quite significantly affecting the entire financial market. Here are the main reasons for this fall.
Financial markets don’t like uncertainties. Brexit created uncertainties in the market. So, UK has not seen as a safe place for investment anymore. Instead, investors are moving towards US and Europe.
Decline in portfolio investment
London has been a dominant European trading center. It attracts many capital flows. As UK is now outside the EU market, it will make London an unattractive place for trading. So, less capital will flow in, and the value of Pound will drop.
Current account deficit
UK has a high current account deficit as a percentage of GDP. This has been financed by capital flows so far. But if there is less capital flow, the value of Pound will fall to fix the trade imbalance.
Euros becoming stronger
If Euros become stronger for economic reasons, then the value of Pound will drop. So, as the value of Euro will increase we can observe the value of Pound to go down.
Purchasing power parity
If the goods in the UK become more expensive than those of the other countries, then there will be a decline in the demand for UK exports. So, the value of Pound will decrease.
Once the economic situation becomes stable, the value of Pound will be restored again. The Brexit had a great impact on the value of Pound, but the situation is expected to get better soon.