Reasons To Invest In Fixing Your Credit

Get Approved for Higher Limits:

Your borrowing capacity is based on your income and your credit score. One of the benefits of having a good credit score is that banks are willing to let you borrow more money because you’ve demonstrated that you pay back what you borrow on time. You may still get approved for some loans with a bad credit score, but the amount will be more limited.

​Easier Approval for Rental Houses and Apartments:

More landlords are using credit scores as part of their tenant screening process. A bad credit score, especially if it’s caused by a previous eviction or outstanding rental balance, can severely damage your chances of getting into an apartment. A good credit score saves you the time and hassle of finding a landlord that will approve renters with damaged credit.

​Better Car Insurance Rates:

Add auto insurers to the list of companies that will use a bad credit score against you. Insurance companies use information from your credit report and insurance history to develop your insurance risk score, so they often penalize people who have low credit scores with higher insurance premiums. With a good credit score, you’ll typically pay less for insurance than similar applicants with lower credit scores.

​Avoid Security Deposits on Utilities:

These deposits are sometimes $100 to $200 and a huge inconvenience when you’re relocating. You may not be planning to move soon, but a natural disaster or an unforeseen circumstance could change your plans. A good credit score means you won’t have to pay a security deposit when you establish utility service in your name or transfer service to another location.

​Low Interest Rates on Credit Cards and Loans:

The interest rate is one of the costs you pay for borrowing money and, often, the interest rate you get is directly tied to your credit score. If you have a good credit score, you’ll almost always qualify for the best interest rates, and you’ll pay lower finance charges on credit card balances and loans. The less money you pay in interest, the faster you'll pay off the debt and the more money you have for other expenses.

Why You Deserve To Have "Good Credit"

What Most People Miss.

Society is becoming increasingly dependent on credit to make purchases and financial decisions. A good credit score is used for more than just getting a credit card or a loan. Credit scores demonstrate your history of paying your debts to entities that loan you money.

Due to extending themselves beyond their means, many people are not able to pay their debts. At the same time, general living expenses take a toll on people's paychecks. Businesses have good reason to insist you have good credit before providing products or services on credit.

Some employers are even beginning to run credit checks to see if you can be trusted with company finances or assets. If you have a history of not being financially responsible, you may run into problems finding work.

Credit Can Affect Where You Live

Before you can buy a house, mortgage lenders want to know that you won’t default on your mortgage. If you don’t have good credit, the lender will consider it risky to give you a mortgage loan.

If you're approved for a mortgage, your credit affects your interest rate. Interest rates directly impact your monthly mortgage payment, by either increasing or decreasing the amount you are charged. Low credit scores will cause a loan application to be disapproved, or approved at a higher rate.

While you may not currently be in the market for a house, your credit is still important. Landlords also use your credit to decide whether to rent to you. Property rental is considered to be a loan, and owners want to be sure they will be paid.

Auto Loans Require Good Credit

Most people do not have the money to fund a vehicle and cover living expenses at the same time. Many will apply for an auto loan. Your credit rating affects whether you are qualified, the amount you can receive, and the interest rate of the loan. Generally, loan applicants with a higher credit rating can qualify for larger loan amounts with lower interest rates.

A low credit rating will limit your choices. Few lenders will work with you if you have low credit—those that do will charge a much higher interest rate on your auto loan. A higher interest rate will significantly raise the amount you pay monthly on the car, which raises the total amount you pay over time.

Credit Checks For Employment

Many employers conduct credit checks as part of the hiring process. (Note that employers check credit reports, not credit scores.) If you haven’t demonstrated financial responsibility, a prospective employer might be hesitant to hire you.

For example, the employer might believe your level of debt is too high for the salary offered. Some employers also check credit scores before giving a promotion or raise, especially for financially-related or executive positions.

Business Loans Require Good Credit

Many people have dreams of starting their own business. Most business startups require a sizable amount of cash that you might not have available. In that case, you’ll need to obtain a small business loan. Among other things, you need to have good credit to qualify for the business loan.

Living Expenses Can Require Good Credit

It might be somewhat shocking to learn that your credit is needed to establish utility services. Electric companies contend that you’re borrowing one month of electric service. Before turning on your electricity, the company will check to see if you have good credit. Most utility services conduct credit checks, including cable, telephone, water, even cell phone service providers.

You Need Good Credit To Live Comfortably

Since your credit is defined by how you’ve paid (or not paid) your bills in the past, many businesses—landlords, mortgage lenders, utility providers, and even employers—use your credit to predict your future financial responsibility. Anytime you need to borrow money, finance an essential item, or set up services, your history of paying bills (your credit) is called into question.