Credit score matter more than many people realize or consider. It impacts more areas of life than just the ability to qualify for a credit card or a loan. And since your credit score is calculated by how you pay your bills (past and present), businesses and service providers use the score to help predict your ability and willingness to responsibly handle your finances and help them decide whether to provide goods and services.
Home Mortgages and Rental Agreements
Most consumers do not have the means to buy a home outright but must depend on credit. Mortgage lenders need to be reasonably assured that you won’t be a credit risk, especially in a depressed housing market or during recession. The higher your score the more likely you will get the loan you need. A low score could result in higher interest rate charges or outright denial of your request.
Anyone looking to rent their first home or apartment will find their credit score to be a determining factor of approval or denial. Landlords consider your rental agreement in the same way as a lender views a mortgage, as a loan. The apartment or rental unit has value to the owner and is essentially being loaned to the tenant. The landlord wants to have the same assurance as the mortgage lender. A low credit score could potentially be the reason you are denied your first apartment.
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Automobiles and Motor Homes
A means of transportation is typically the second largest purchase Americans make. Much in the same way as living spaces, people typically need to borrow money to purchase a car, motorcycle or all-terrain vehicle. The higher your credit score, the more you will be allowed to borrow and at a lower interest rate.
Job and Upwardly Mobile Opportunities
This is probably the most surprising way that your credit score can affect your entire life. Employers use your credit score in their hiring process to help determine your level of responsibility and money management. A too low score may indicate financial trouble and thus cause a potential employer to look to other applicants with less baggage. Even a promotion by your current employer may be at risk, if you have a mediocre credit score.
Starting Your Own Business
Most people who begin a new business require sizable amounts of financing to businesses start out. Entrepreneurs looking to qualify for a business loan will need to have good credit.
Cell Phone and Utility Services
Many people have never considered that a utility or phone company uses their credit score to initiate service. In the same way as a landlord is lending his space, the utility companies are lending their service. This applies to most utility services including cable, water, gas, electric, landline and cell phones.
Anytime you apply to borrow money or services, your credit score is called into question. This is why maintaining good credit is so important.
Noreen Ruth is a writer specializing in credit card and financial information, she has extensive knowledge and experience writing articles that help consumers use credit to their best advantage. For additional articles about everything you need to know about credit cards and”>http://www.wowcreditcards.com/0-interest.htm”> 0% interest credit card applications, visit WowCreditCards.com – Credit Card Applications!
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