Importance of Good Credit?
What will having good credit do for you? please list some reasons. If u want 10 points, explain a little. Thanks! :D
- Anonymous1 decade agoFavorite Answer
You need good credit to buy a house, car, cell phone, etc. The higher your credit score, the better "deal" you can get on some things. For instance, when buying a house, a person with a 700+ score can get a better interest rate than, say, a person with a 650+ score. The same goes for buying a car. Having NO credit/not having established a credit history can be just as bad as having bad credit. This is due to not having proven yourself in the credit world. Credit is very, very important for these reasons. That's why it is important to never co-sign on a loan with someone unless you are willing to pay for that loan should the other person default. If you have co-signed with someone and they don't pay the bills, it will ruin your credit, too. Hope this helps.
Some employers will also run a credit checks as will Direct TV, cable companies and apartment complexes. Bad credit means you can't get or could have trouble getting any of these things, let alone a credit card.
- 1 decade ago
Having good credit, or a good credit history will make it easier to borrow money in the future. Chances are, unless you're independently wealthy, you'll probably need a loan at some point in your life to buy or lease a car, buy a house, or even to rent an apartment.
While it would be nice, and obviously more cost effective if we could go through life without needing credit or to borrow money, the reality is you typically do, and having good credit is like having a good reputation; if you need the money, or car, or house, or just that new iPod before your next paycheck, having a good 'reputation', or good credit, means you have the flexibility in your life to make those decisions happen.
You can begin to build credit by getting a card for a retail store, or a normal Visa or Mastercard which initially is for a small amount and using it. The longer you've had 'credit' or a credit history (including credit cards, loans or mortgages), the better your credit rating will be. Also, maintaining a low debt-to-credit ratio will improve your credit rating. Also making at least your minimum monthly payments on any debts will show that you're a faithful borrower and are 'good' for the money.
Hope this helps.
- 1 decade ago
A credit history says a lot about someone. A landlord could refuse you an place because a low score indicates a higher likelihood of missing rent payments. A potential employer could use your credit score to estimate whether or not you will stick around with the company or just leave in 3 months. Someone with a lower score will pay higher interest on a mortgage resulting in as much as a 60% increase in monthly payments.
Like it or not, it can and is used to judge your personality and having a low score is better than having no score at all.Source(s): http://www.fcac.gc.ca/eng/publications/CreditRepor... This is a government of Canada website but the American system is similar.
- Extra OrdinaryLv 61 decade ago
good credit is a way for me to gauge my self worth and evaluate the worth of others...
but more seriously, good credit earns me the chance to get into more debt in the future.Source(s): lol