Why is it important to have good credit? Can you go through life not being concerned with the importance of good credit?
Well, that depends on the kind of life you live. Most of us need to borrow money at one time or another and that is why good credit is important.
A credit score below 550 is considered poor. Just under 12% of Americans have a poor credit score.
If you’ve ever wondered, “Why is good credit important?”, you can find out the answer here. Read on to learn why you should have good credit.
Why is Good Credit Important?
Unless you are blessed with unlimited amounts of money, you are going to need a loan or credit at some point in your life.
Building good credit will benefit you in various aspects of your life, not just when you need a loan.
Let’s look at why good credit is important.
1. Getting a Job
Believe it or not, a potential employer may look at your credit score when considering you for a job.
A low credit score may tell them that you are a risk that they don’t want to take. If you come off as someone who shirks responsibility by not paying your bills, they may think you will not live up to the requirements of the job.
2. Better Car Insurance Rates
Research has shown that people with poor credit scores tend to make more insurance claims. Unfortunately, that translates to higher insurance premiums for those folks.
Keeping your credit score in the good/excellent range will benefit you with lower car insurance premiums.
3. Lower Interest Rates
When buying something like a home or automobile with a loan, a better credit score will afford you a lower interest rate and therefore, a lower payment.
Someone with a bad credit score will probably not even qualify for a home loan. A car loan is a little easier to get with poor credit, but you’ll pay a lot more for the same car than someone with a good credit score.
You can visit sites like BonsaiFinance that specialize in low-interest rates.
4. Easier to Get Approved for Rentals
Renting an apartment or a home? Landlords tend to shy away from people with bad credit scores. The rental business is too risky to take a chance on someone with bad credit.
You’ll find it much easier to qualify for a rental property when you can show that you pay your bills.
5. No Security Deposits on Utilities
Scheduling utilities at your new place is hassle enough, but add paying a $100 or $200 deposit to it makes it even worse.
A good credit score will help you avoid such deposits. Even if you are not planning to move any time soon, you never know when you might be in a situation where you have to relocate so keep your credit score where it should be.
Got Good Credit?
Now that you’ve seen the answer to the question, “Why is good credit important?”, you can now begin to build up a good credit score or work to repair a poor one. Don’t forget to bookmark our blog for great advice on health, fitness, and life in general.