Having bad credit can make many aspects of life more difficult in the UK. From getting a mobile phone contract to renting a flat, poor credit scores often lead to higher costs, more hassle, and fewer options. Here’s a look at some of the key ways bad credit can negatively impact daily life:

Housing

Landlords and letting agents will almost always check your credit file before letting you rent a property. If you have a history of missed payments or other black marks, you may struggle to find a landlord willing to rent to you. Some may ask for a larger deposit or extra months’ rent upfront. Those with the very worst credit histories may be unable to find any suitable rental properties at all.

Utilities

Energy and water companies also typically check your credit file before allowing you to open new accounts. Those with poor credit may have to pay large deposits before utilities will be switched on. Some households end up relying on prepayment meters, which can be more expensive. There’s also the risk of self-disconnection if you can’t afford to top up the meter.

Mobile Phones

Most mobile providers now require a credit check before offering a contract phone. Those with low credit scores are unlikely to be approved for the best smartphones on long contracts with low monthly payments. You may be limited to SIM-only deals or basic handsets on 30-day rolling plans. This can prove costly over time compared to 24-month contracts with affordable smartphones.

Loans and Credit Cards

For those with damaged credit, it can be difficult or impossible to access new credit from mainstream lenders. Without access to credit cards, personal loans or overdraft buffers, paying for big purchases like buying a car or covering unexpected bills becomes a struggle. Some turn to alternative lenders like payday and doorstep lenders, but their high interest rates can lead borrowers into further debt trouble. Luckily, there are options here, and it’s possible to get finance for bad credit for purchases like a new car.

Insurance

Insurers also use credit reports to assess how risky you are and price your premiums accordingly. Those with poor credit often pay higher premiums for cover like home, motor and travel insurance. Some with very bad credit histories may struggle to get quotes at all, leaving them uninsured.

Employment

While it’s illegal for most employers to credit check without your permission, some industries like financial services do request credit file access. Even when employers don’t directly check your credit, a history of missed bill payments or county court judgements may suggest to them that you can’t manage money or repay debts – and this could count against you.

Relationships

Financial troubles and bad credit don’t just affect your relationship with lenders – they can strain personal relationships too. If you rely on a partner for money or are unable to get a mortgage on a joint home, it can negatively impact your relationship. Some couples end up separating due to money issues.

Stress and Mental Health

Managing problem debts or being turned down for credit and housing can seriously affect mental health. Financial struggles are a leading cause of stress which can contribute to issues like depression and anxiety. Those with bad credit are more likely to experience worse mental health outcomes.

Bad credit closes doors to housing, utilities, phones, and lending. It leads to money struggles and relationship issues. That in turn causes stress and damages mental health. While it is possible to rebuild your score over time, the impacts of credit report black marks make daily life undeniably tougher.