Bad Credit Hurts: Insurance, Jobs, Housing, Medical Treatment!
By L. Jed Berliner, Massachusetts Bankruptcy Attorney on Jun 30, 2008 in Benefits of Bankruptcy, Life After Bankruptcy, Massachusetts
People contemplating a bankruptcy filing either already have bad credit or are about to. You may be perfect with your payments, but you’re running out of steam. Bankruptcy can improve your credit, since discharged debts must be listed as having a zero balance owed.
Bankrate.com published today about many different ways a bad credit score can hurt. It quotes Clarence Smith, who authored a study for Conning & Co., saying that “consumers with bad credit [are] paying between 20 percent and 50 percent more in auto insurance premiums than their good-credit neighbors.”
Bankrate.com also quotes the Consumer Federation of America’s 2004 study about American Honda Finance Corp. charging 3.5% higher on car prices for poor credit buyers (General Motors Acceptance Corp. and Ford Motor Credit Corp. capped their price increases at 2.5%), with car financing interest between 19% and 26% for new car purchases, compared to the 6% - 7% average.
Doug Borkowski, a financial counselor with Iowa State University’s Financial Counseling Clinic, is quoted as saying that 70% of employers check the credit of their applicants.
The article goes on to discuss an impact on rental housing, utility deposits, elective surgery payment plans, and student loans.
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