Why Good Credit Is Important

Introduction

Our Society is becoming increasingly dependent on using credit to make purchases and decisions because countries are adopting cashless economy. These days, good credit is used for more than just getting a credit card or a loan. More businesses are making the case that you must have good credit before they extend there products or services to you. Credit is contractual agreement between a lender and a borrower in which the borrower assumes something of value, and agrees to repay the lender at future date. should you apply for credit (say a loan or a credit card), the lender has to decide if you are a good candidate for receiving the loan. The lender’s decision is based on your credit history. the level of risk involved will be assessed if they are to extend credit to you. If you have a poor repayment history, it is less liable that you will be approved for the loan or a line of credit. Lower your credit score result in higher interest rate. Over the life of a mortgage or auto loan, higher interest rates will cost you thousands and thousands of dollars. If you plan to take any of this loans or a new credit card, it would be ok if you pull your credit reports to see where you stand and start making improvements now.

History

You will be amazed to learn that it is not just credit card companies that look at your credit records. In fact, employers, landlords, and insurance companies can also gain access to your credit record. In order to review your past payment history and spending habits to ascertain if you are a responsible financial consumer. If you evince an inconsistent payment history in the past, this is an indication that you may do the same in the future .It is vital to know that today's economy runs on credit. If you want to get a mortgage loan for a house or a student loan to pay for college tuition, or if you just want to put your lunch on credit card a company is extending credit to you.

Your creditworthiness is defined by your three-digit credit score and is the key to your financial life. Good credit can be the make-or-break detail that determines whether you'll get a mortgage, car loan, student loan. On the other hand, bad credit will make it more difficult for you to get a credit card with a low interest rate and it will make it more expensive to borrow money for any purpose.But even if you're not in the market for a loan, good credit can have a major impact,

Features

Your credit information can be a factor in whether or not you can rent a good apartment, how much you pay for insurance or whether or not you can get a job. Landlords, insurers and employers frequently use credit information as a litmus test to see if the people they are dealing with are reliable and responsible.

 

Comments

Most Recent Articles