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8 Reasons Why It Is Important To Have Good Credit
Why is it important to have good credit? There are different factors that are affected by your credit score. Here are 8 reasons why you may want to have good credit and keep it that way.
1. Owning Or Renting If you would like to own a home anytime in the future, mortgage lenders are going to check your credit. If you do not have good credit, you may be refused a mortgage loan. If you are looking to rent a home or apartment, a landlord may refuse you if you have bad credit. It is important to have good credit when you are applying for a big loan, like a mortgage.
2. Buying A Car If you want to buy a car, it may be difficult to get a good interest rate on an auto loan if you do not have good credit. Also, some car dealerships may require you to have someone sign as a cosigner on your auto loan if you have a lower income and bad credit. It may be hard to find someone to cosign your loan. If you have a bad credit history, then the person who you ask to cosign may not trust that you will pay the loan on time.
3. Personal Loans Another reason why you want to have good credit is if you are looking to take out any kind of personal loan from a bank. If you do not have good credit, you may have to pay a higher interest rate on the loan. By having good or excellent credit, you will have more money in the long run by being eligible for lower interest rates. You may not even be approved for a loan if you have less than good credit.
4. Credit Cards With good credit, you will have a much better chance of being approved for a credit card or getting more credit. If you do not have good credit, you may have a hard time getting another credit card. You may be denied by many credit card companies. If you have bad credit and a credit card company approves you for credit, you may have to pay a fee to keep the card. Having good credit will allow you more opportunities to take advantage of special credit card offers such as those that offer lower interest rates or special rewards.
5. Employment In recent years, some employers have been doing credit checks and will only hire a person if they have good credit. If you do not have good credit, you may be denied a position for a job. Keeping good credit would be ideal for those who are in the market searching for employment.
6. Save Money You will save more money if you have good credit. If you have been late paying your bills and loans, you are most likely paying late fees to banks or companies. Mortgage payments that are not paid on time accumulate late fees as well. If you total up all of the late fees that you were charged, you may realize that it is money you could have saved or spent elsewhere, other than paying a fee for a late bill. Also, by having good credit, you will most likely get lower interest rates and therefore you will save more money when taking out a loan.
7. Credit Limit Having good credit may allow you to increase your credit limit on credit cards. If you have a credit card with a low credit limit, you may be able to request an increase for more credit on your card. If you have bad credit, you may be denied for a credit increase or you may not receive offers for credit limit increases.
8. Peace Of Mind Having good credit may give you peace of mind. Drowning in debt and being denied for loans may bring you down and make you feel like you can never catch up paying all your debts. The best thing to do is start working on your credit as much as you can. Establish good credit and you may be able to save more money, be approved for more loans and have a better peace of mind.