When will YOU realize how important your credit score is?
Society is becoming more and more dependent on using credit to make purchases and decisions. Did you know your credit is used for more than just getting a credit card or loan? Businesses want to know if you have good credit before they extend products or services to you.
Here are just a few things you may not be able to take advantage of if you have a bad credit score:
Don't think that just because you're you're not looking to buy a house that your credit isn't important. Landlords use your credit to decide whether or not to rent to you. Landlords consider leases a loan. You’re being loaned a place to live and the landlord wants to know if you'll be able to make your rent payments on time. If you have bad credit, it's a sign that your rent payments may be unreliable, so there's a good chance that they'll deny you the apartment and give it to someone with a better credit score.
Unless you have enough cash on hand to purchase a car outright, you’ll need an auto loan. Your credit affects whether or not you qualify for a loan, and it will also affect the amount of your interest rate. Fewer lenders will work with you if you have bad credit. Those that will work with you will charge you a much higher interest rate because they see lending you money as a greater risk. Higher interest means a higher payment, and that's if you qualify at all!
Many employers now conduct credit checks on potential hires. If you haven’t demonstrated financial responsibility, an employer might be hesitant to hire you. The employer might believe your level of debt is too high for the salary. Some employers check credit scores before giving a promotion or raise, especially for positions related to finance or executive positions.
It might shock you to learn that good credit is needed for utility service. Your electric company contends that you’re borrowing one month of electric service. So before turning on your electricity, the company will check to see if you have good credit. If you don't have good credit, they may see turning on your electricity as too big a financial risk! This applies to most utility services, including cable, telephone, water, and even your cell phone.
Since credit your credit is defined by how you’ve paid (or not paid) your bills in the past, many businesses use your credit score to predict your future financial responsibility. Anytime you need to borrow money or services, your credit comes into play. This is why maintaining good credit is so important.
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*The information in this article has been provided strictly for educational purposes.