subject: 7 Reasons Good Credit Is Important [print this page] You never realize just how much you need good credit until you try to use credit and you dont have it. There are many things you cant do these days unless you have good credit. That includes things like getting a job and even a place to live. Here are some of the reasons that good credit is so important.
Buying a House or Renting an Apartment
Without good credit, youll have a hard time finding a place to live. Of course, mortgage lenders check your credit before theyll give you a loan to purchase a house. If you dont have a good credit score, you could end up with a high interest rate loan. Worse, you could be denied completely. Even landlords check credit before allowing you to sign an apartment lease.
Once you get a home or apartment, good credit will come into play when you get utilities turned on in your name. Most service providers do a credit check before turning on your electricity, gas, water, cable, and other services. If you dont have good credit, you will likely have to pay a high security deposit before you can have services turned on in your name.
Buying a Car
Buying a new car requires good credit, too. Auto lenders run a credit check before approving an auto loan application and, like a mortgage loan, you can be denied if you dont have good credit. Unfortunately, not having good credit could leave you without the transportation you need.
Getting a Job
Good credit is vital to your career. So many potential employers now check for good credit as part of the hiring process. This is especially true in government and financial positions. Negative information in your credit history could keep you from getting hired. Not only do employers check for good good credit when theyre hiring new employees, they often do credit checks before giving some employees a promotion or a raise.
For Lower Insurance Rates
If you want the lowest insurance rates, youll have to have good credit. Insurance companies now check credit in the underwriting process. They say that people with poor credit histories have greater chances of defaulting. So, if you dont have good credit, youll likely find yourself with a higher interest rate.
Starting Your Own Business
Thinking about starting your own business? Your credit will be a factor in getting the small business financing you need to get your business up and running. If you have bad credit, you may be denied for small business loans.
You can get around having good credit, but it will make life tougher. Since good credit is required in so many aspects of life, its better to work in repairing your credit than to go without the benefits of having a good credit score.
