Many people believe that a credit rating will only affect you when you are trying to take out a sizable loan to purchase a home, car, or new business, but they fail to realize that it affects more than simply whether or not they can qualify for that loan. It can also have a huge impact on the interest rate that is offered if you do qualify for that loan. If you have a poor credit rating, it tells the creditor that you, for whatever reason, were unable or unwilling to repay previous loans according to the terms set out by the creditor. In their eyes, this makes you a higher risk candidate than someone with a good rating. As such, should you qualify for the loan, you will be given a much higher interest rate than someone with a clean credit history.

Source: How to Get Very Bad Credit Loans