Why Your Credit Score Is Important
In spite of all the credit cards that are out there, many people believe that a person will be happier if they live a credit-free life and only buy the things that they can afford. They may have no credit cards or one credit card that they use for emergencies.
Having a good credit score is important even if you do not care about acquiring the latest card. If you drive a car, you’re going to have to get insurance for that vehicle. Many insurance companies will run your credit score before deciding what premium to charge you.
You May Need Good Credit to Put a Roof Over Your Head
If you have bad credit, You may not qualify for a mortgage or you may end up paying very high rates. Landlords also use your credit rating when determining whether or not to rent an apartment to you. You may end up having to pay an extra deposit or having to live in a less desirable place.
Even when you do get a house or apartment, you are likely to have to pay a large deposit when you set up your utility bills if you have bad credit. You may not be able to get the best phone plans either and you are likely to have to prepay your bills.
There are Many Advantages to Good Credit
When you have good credit, companies will come to you with great offers. If you do want a credit card, you will get the very lowest interest rates. Many credit cards charge an annual fee to people who have poor credit.
If you want a corporately sponsored Visa or Mastercard such as a card from an airline that will offer you frequent flyer miles or a card from a chain store that offers discounts on all of your purchases.
It Can Help You in an Emergency
You will get approved for higher credit limits when you have a high credit score. If you only use your credit card for emergencies, this can be extremely beneficial if you ever actually have an emergency. If you only have a $200 credit limit, it would be very unlikely to help in the case of a real crisis.
It Can Help You Get a Job
Depending on the state in which you live, a potential employer may run your credit report before they hire you. Some companies will do this to establish whether or not you are trustworthy.
If your job requires a security clearance of any kind, a credit check will normally be mandatory. It is best to have outstanding accounts paid if you are applying for a government job.
What is Considered a Good Credit Score?
A person is generally considered to have good credit if their score is between 661 and 780. You are considered to have exceptional credit if your score is between, 781 and 850. If your credit score is below 600, you may want to think about changing it.
What You Can do to Increase Your Credit Rating
There are a few different things you can do to improve your credit rating. You can run a copy of all three of your credit bureaus and see if there is anything that you think is wrong. There are some companies out there that can help assist you with disputes if you notice mistakes.
You can enroll yourself in a credit building program that will allow you to save money and build credit at the same time. There are services that will allow you to save money in a Certificate of Deposit account. A CD is a savings account that you agree not to take money out of for a certain amount of time.
A credit building CD account will have you deposit a certain amount of money into savings once a month and it will record that as an on-time payment to the credit bureaus.
You can also get a secured credit card. Some credit card companies allow you to open an account by simply filling out an application form and paying a deposit. The amount of money you deposit will be your credit limit, so there is no risk to the company. When you pay your bill on time, they will report it to the credit bureau.
Good credit is important no matter who you are or what your lifestyle might be. If you clean up your score, you might find that a new world of opportunity will open up to you.