It is safe to say these days that anyone who is continuing maxing out their credit cards and paying bills late, understands that this will have a negative bearing on their credit score. This negative bearing will influence future lenders and will inevitably reduce the chances of successfully applying for further finance.
Many decades ago we were judged as an individual and little weight was placed on our credit score. In fact there was a time when a credit score was unheard of. Now though, and increasingly so, we are all judged on our credit-worthiness and our ability to repay debt. Of course this is due to the fact that most adults survive our daily obligations through the effective or ineffective use of credit cards and loans. There are some very clear and indicative side effects of allowing our debt ratio to exceed our income and assets.
One major pitfall is that lenders always view this type of activity as high risk, which then seems to justify them charging much higher rates of interest on lending. In some cases the interest applicable to a borrower may be 5 or 6 percent points higher than the standard low risk borrower, and although most people see this as unfair, more and more people continue to rack up credit card debt regardless.
Another setback of not managing your debt properly and allowing a negative report to build up, is the potential problems you may have in securing rental or lease promises. With a heavier than usual reliance on credit information, many landlords and letting agencies are referring to an individual's credit score to determine the potential risk in letting an apartment. Again this is arguably fair, as rent is always paid in advance and typically with a security deposit. However until things change a negative credit score could influence your ability to rent.
It is imperative that whenever you feel in your credit score is in a position where you may be adversely affected, you take whatever measures are available to rectify the situation, and do so as early as possible.