Building good credit is difficult for a lot of people. After all, the very things that help create good credit scores – using credit cards and loans – are the very things that can get us into trouble if we’re not careful.
But make no mistake: building a positive credit history is incredibly important to your financial life. Actually, if we’re really being honest, building a positive credit history is incredibly important to your overall life. As people who have had some money mishaps know, a bad credit score can make life really difficult.
So how exactly does having good credit make your life easier? Here are three examples:
Finding a home
Most of us know that a good credit score is a key piece in the puzzle that is buying a home. Since your mortgage is likely the biggest loan you’re going to take out, it’s understandable that banks want to lend to people with good credit. Most are looking for customers with credit scores over 700, so if you’re looking to buy a home, having a high score will work in your favor.
But even if you’re not interested in buying, it’s critical to have good credit. This is because nearly all landlords run a potential tenant’s credit before agreeing to lease to them. Having good credit means you’re good with money, and people who are good with money are more likely to pay the rent on time. So no matter which way you cut the cake, you’ll need a good credit score to find a decent place to live.
Shopping for insurance
While insurance is a financial product, most people don’t immediately see the connection between their credit score and their insurance premiums. But insurers (like lots of other people and institutions) look at a person’s credit score as a marker of how responsible they are. People with higher scores are viewed as being more careful, and careful customers are cheap customers as far as insurance companies are concerned.
Rightly or wrongly, having good credit will make it much easier for you to find insurance at a fair price.
Getting a job
While the issue of checking potential employees’ credit before extending a job offer is a controversial one, and is in some cases illegal, there are some jobs that simply can’t be obtained if you have a shoddy credit score. For example, government jobs that require high-level security clearances, or jobs in the financial sector.
It would be a shame to get passed over for your dream job just because your credit stinks, so be sure to make it easier on yourself by avoiding debt and paying your bills on time.
Life is tough enough without bad credit putting up a bunch of barriers. Keep your credit healthy so that you’ll be smooth sailing – some of the time, at