A good credit score is an important attribute for any individual to have. While you may not want to block yourself into countless loans with high interest rates and no end to the payments in sight, some loans are a necessary aspect to life. Building a credit history and maintaining a high credit score can have a dramatic impact on your quality of life now and years in the future when you're considering applying for a loan or prepaid debit card.
Buying a House
Purchasing a house is one of the greatest investments you can make in your own future. It’s also one of the most difficult ones to achieve if you don’t have a good credit score. The nation has been overtaken with foreclosures and short sales, forcing banks to crack down hard on future homeowners with even more stringent requirements to qualify for a loan. Maintaining a good credit score now will make it easier to get a home loan in the future.
Buying a Car
This is a common type of purchase to make, with many Americans taking out loans for vehicles on a daily basis. Car loans are much smaller than house loans, so they’re a little easier to get with a poor credit score. At the same time, with a poor credit score you can expect to see higher interest rates and a larger required down payment on a vehicle.
Starting a Business
If you’re thinking about starting a business and need a business loan, guess what? Your credit score and history will factor into your eligibility for small business financing. Regardless of whether you’re starting a business from scratch or trying to get the funds to expand, your individual credit score will affect your ability to get a loan for your business.
Getting a Job
You may not have heard of this one before, but many employers are now running credit checks on prospective employees prior to hiring them. This is especially common in the government and financial sectors. A negative score or history could potentially keep you from being hired or even getting a raise.
Getting Lower Interest Rates
While a good credit score is an important factor in obtaining any type of financial assistance, many banks are still willing to give loans to individuals with poor credit. However, if your credit is damaged, it will still be a struggle to get a loan, and when you do, you’ll likely notice a much higher interest rate. This is how financial institutes outweigh the risk of giving you money.
So if you want better interest rates to save yourself more money in the long run, keep that credit score high. It’s easy to get by with a good credit score or even fair or poor one, but realize it will end up costing you more in the long run because of the risk you pose to lenders. Rather than just dealing with a low score, work to repair your credit score by making payments early, paying off loans before the end of the loan period and paying off your credit card in full each month.
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