subject: The importance of Good Credit [print this page] The importance of Good Credit The importance of Good Credit
Your credit score is an integral part of the financial portfolio. We typically spend a lot more time thinking about our assets (i.e. bank balances, investments, real estate) than we do our liabilities. But there are several big wins available on the other hand from the balance sheet. It will matter what type of rate you get on your mortgage, how flexible your business is, and whether you land that next high paying job. Those big wins matter. And they're all affected by your credit rating. Also called your FICO Score.
Obviously all kinds of lenders (credit card issuers, mortgage companies, banks, etc.) make use of this score to help decide if they want to use you. If you need to use those products, then you'll want the most favorable rate of interest possible. A higher score can mean a minimal rate in your mortgage.
The Fair Isaac Corporation (FICO) setup the FICO Score to ensure that lenders could quickly determine if you're to become trusted when it comes to paying back debt. They suggest that the higher the score, the more likely it is that you will be capable of paying back a lender for the money borrowed.
Others also use the FICO Score to find out when they wish to accomplish business with you. For instance, cell phone and TV service companies often have to figure out how credit worthy you are before they invest a great deal of upfront cost in you. A high score will help you avoid a big deposit requirement to set up a merchant account.
Given those reasons, it's probably smart to a minimum of do your homework and try to improve your credit score. Even many people in the anti-credit camp will agree that they must depend on a nice credit score to obtain a decent mortgage rate.
