Today a lot of decisions and purchases you make are impacted by your credit. It is more than just applying for a loan or a card. The list of businesses that make the requirement of you having good credit before they extend services or products to you keeps growing.
If you want to buy a home, lenders for mortgages want to know you won’t miss any payments. It will determine how much you pay and even where you can live. Without any good credit, mortgage lenders will probably determine it is too risky to approve you for a loan. If you do get approved, your interest rate will be a affected by your credit score. The lower your score, the higher your mortgage.
It is the wrong mentality to think that because you are not looking for a house to buy now that your credit score is not important. Even if you rent a property, some landlords check your credit to see if you are reliable and will pay your rent on time. If you don’t don’t have good credit, you could be denied or you may have to put down more of a security deposit.
Having bad credit also limits what you drive and how much you pay every month. Unless you have the money upfront to buy a car, you will have to take out a loan. If you have good credit usually you can borrow a larger amount with a lower rate of interest.
A bad credit score can also get you denied for a job. Some employers check your credit report and assume that if you haven’t had a good record that you would not be right for the job or the responsibilities. Also they may assume that you owe too much for the amount of money that you are going to be compensated. Sometimes employers even check before promotions as well.
If you want to start a home business, you also need to have good credit. A lot of businesses require a good amount of money to start up, which may require you to take out a loan. When you start a business the last thing you would want is more interest to add on to your bottom line when you need to start making profits.
Having good credit can also a factor for your utility bills. Some of your utility companies are assuming that you are actually borrowing a month of services because you haven’t paid for it yet. If your credit is too poor they will probably make you pay more or make a deposit.
These reasons are important enough to always stay on top of your credit because companies and employers can pull up your past reports and determine how much of a loan, how much interest or if you are even approved for money, electric or a job.
To your good credit,
Michael Faller
