We hear so much about credit scores throughout the world of personal finance, that by now most of us know that it’s something important to pay attention to. Better yet, it’s important to make sure that we have good scores.
But why does your credit score matter? Well, it can help you out in a variety of different situations that can impact different parts of your financial life. Really, in totality, your credit score can actually impact your overall quality of life too.
Here are 5 situations where having a good credit score can be very important:
Getting a Job
Yes, some employers might actually check on your credit before bringing you on. If a potential employee can’t manage his or her own money properly, why would you want to entrust your business to them in any way? Since saving money requires income, we can’t exactly get ahead in life without a job. It’s best not to interfere with this, and having good credit can remove one potential obstacle.
Buying a Home
While the housing market has shown a short-term upswing of late, things aren’t like they were 10 years ago. Back then, it seemed like a person with a pulse could at least have some kind of shot at getting a home loan. Now, its not as easy. If you want to buy a home and get a loan to do so, don’t have a history that reveals that you’re a credit risk. Carrying a subpar poor credit score could almost be considered a first-time homebuyer mistake, since it could prevent a person from actually becoming one!
Buying a Car
Now, I bring cars into the picture here despite my view that it’s better to pay cash for a car instead. No 96-month loans for me! That being said, not everyone is in a position to buy a functional, safe car with cash. For people that need to take out loans, which might well be a majority of car buyers, having a good credit score can help with obtaining the right loan.
Starting a Business
If you need to take out a loan for a business, which many new business owners do, it helps to convince a lender to work with you if you have good credit. Would you want to lend to someone to start or grow their business, if that person has bad credit to begin with?
It seems hard to imagine having difficulty getting utility services because of one’s credit. However, people can be required to put up a deposit before getting services, which could be impacted by credit history. Why create hassles with something so basic to modern life as utilities?
Bottom Line: One’s credit can actually impact the day-to-day life a person lives. Where you work, where you live, what you drive, how you can reach your business goals, and simply getting utilities hooked up without a hassle are all influenced by your credit.
My Questions for You
Have you noticed how important it is to have good credit?
What have you done to make sure you have a solid credit score?
Have you (or anyone you know) been impacted by a low score?