Your credit score is more than just a number – it is an estimate of how dependably you can be trusted to pay back money you borrow, whether it is for a dress or a dream home. If you are able to build up a respectable history, you’re rewarded with low interest rates. However, if you don’t have an established track record or are burdened with a lower number, you may be surprised by the amount of doors that are closed as a result. Keep reading to understand why having good credit is crucial.
Believe it or not, many businesses are now using credit background checks as a standard procedure in their hiring process. They do this to see if you are a reliable and financially responsible person. If you have late payments, large credit card balances, and a low credit score, you will most likely not be the right employee for them. However, this level of scrutiny is usually reserved for only at the corporate level, as running a background check is a pricey process.
One huge reason to have good credit would be when you are applying for a home or auto loan. In the minds of the bank or lenders, the lower your number is, the higher the risk involved advancing the necessary funds to you, resulting in higher interest rates. The good thing in this situation is that if you have bad credit, you can find an auto loan at places like Auto Credit Express; this avenue is especially helpful to those who are burdened by debt and are looking to quickly establish a solid track record to build up their “number.”
Another reason to stay out of debt and have a good credit score? Once you owe money, it becomes increasingly difficult to free yourself from “the red.” After all, as previously mentioned, those that are hampered with a lower number have to pay back larger amounts in shorter periods of time. The added challenge makes it even more difficult to clear the negative balance, causing interest rates to increase; it’s not uncommon for a person to take out one loan for the purpose of paying back another. On top of this, we are a society driven by consumerism; people with compulsive spending habits are more likely to make an emotional purchase to feel good triggered by various forms of stress, including financial insecurity. It’s a merry-go-round that is hard to get off of once you get on.
Like it or not, bad credit can also hurt your chances at romance. When two people say that they will take each other “for better or for worse,” this means that they agree to build a life with one another, credit histories and all. Owing thousands upon thousands can injure the dream of the pristine home and the white picket fence, causing singles to increasingly inquire about their partner’s credit scores early on in the dating process. If one or both members of a wedded couple bring debt to the table, it is wise to keep banking separate to prevent any future grumbles of “how come I have to pay off your debt with money from our joint bank account?” won’t lead to greater riffs.
Finally, good credit also gives a person a great boost of self-esteem. It will allow an individual to make better investments, pursue greater opportunities, and live without the constant worry of money problems. Taking great care of your debt gives you a sense of power to better negotiate the terms for different financial deals. Simply put, having a strong credit history will most likely give you a better life. If you need help or are in trouble, check out sites like CreditKarma.com to get you back on top.