How important is it to have good credit?
Well, it’s not quite as important as having a pulse but these days it seems to be almost as important.
When you apply for credit with a bank or any other credit provider, the first thing the company will do is check your credit and your credit score. This means that unless you can pay cash for everything in your life, you need to have good credit. Without it, you can’t get credit cards, a mortgage or a home equity line of credit. Not to mention the fact that it may be hard to get a job or low insurance rates.
If you have a high credit score, you probably will be able to borrow more money at a lower interest rate. Conversely, if you have bad credit, you won’t be able to borrow as much money or you’ll pay incredibly high interest.
Nice car or junker?
Need a car? If you have bad credit, you may not be able to buy one or if you can, you may have to settle for an older, less desirable vehicle. In other words, good or bad credit can make the difference between getting a new midsize car or a five-year old subcompact.
Many landlords won’t rent to people unless they have decent credit. If you have bad credit, you might not even be able to rent a decent place to live.
Employers will usually check your credit meaning that if you have bad credit, you might not get that great job.
Start your own business? Not without good credit
Have you ever thought of starting your own business? Starting a business usually takes a lot of money – most of which you would probably have to borrow. If you don’t have good credit, you won’ be able to borrow very much money so It’s unlikely you’ll be able to fulfill that dream and have your own business.
Would you be shocked to know that most utility companies will check your credit before turning on your electricity or gas? Bad credit? You may not be able to have electricity or heat your house or apartment. Or they will hit you with a high security deposit before they turn on the heat and water.
Why you need to know about having good credit
You need to know the difference between good and bad credit, how to build a good credit report, what a credit score is and about credit bureaus. You’ll also need to learn about those free credit reports and credit scores, how to choose a “good” credit card and about identity theft and the things you need to do to prevent your identity from being stolen.
In short, you will need to know how to get and keep a good credit rating and how to manage your credit for a better, less stress-filled life. Having good credit is important for a number of reasons. The more you learn about how to properly manage your finances the better off you will be and the more money you will have in your pocket each month.