Reasons to Maintain a Good Credit Score

Summary: 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, or even services, your credit is called into question. This is why maintaining good credit is so important.

Almost every purchase and decision now is being made based on how you can maintain a good credit score. To have and maintain a good credit score has gone way beyond getting loan or credit cards. A lot of other businesses are beginning to make a case that it is that it is compulsory to have a good credit before they can offer you their goods and services. Here are some reasons why you should maintain a good credit score:

It influences where you live and the cost

Before purchasing a house, lenders will want to be sure that you will not default on your mortgage payment. It you don’t maintain a good credit score, the lender will be reluctant to give a mortgage loan. When you finally get the mortgage, maintain a Good Credit Score has an impact on the interest rate which will in turn affect the monthly payment. When you don’t maintain a good credit score, you will be required to pay higher. If the score is very bad, your mortgage request will most likely be turned down. This is not only restricted to those buying a house. Even if you decide to rent an apartment, your landlords will want to know if you maintain a good credit score to determine whether to rent it to you. Most landlords also see this lease as a loan and will want to be certain you will pay back. With a very bad score, you might not get the apartment.

It influences your car and its payment

You will definitely have to get an auto loan unless you have the cash to make an outright payment. To maintain a good credit score will not only influence if you get the loan but also the interest rates and the amount you pay. People with good credit have a higher chance of getting large amount and lower interest rate when they apply for loan. A bad credit will limit your chances, only very few lenders will agree to give loans to people with bad credit and even when they do, the will request for a very high interest rate. This high interest rate comes with a higher amount to pay each month.

It has an impact on Job search

A lot of employers now review the credit report of applicants before hiring an employee. If they don’t have a good credit report, the employee might see the applicant as financially irresponsible and will be reluctant to hire. The employer might think that your level of debt is too high for your salary. Many employers also uses maintain a good credit score as criteria for pay rise and promotion in financially related or executive positions.

Related Source: Understanding How to Maintain Good Credit Score