We all know that our credit score can have a big impact on what we’re eligible for in terms of credit and nowadays credit gives us access to a way of life. If you want to buy your own home, purchase a car, take out a loan or have use of a credit card for emergencies it can be made far more difficult by having a poor score. We have different credit scores available to view online based on several different factors. Some have a minor impact whilst others have a major impact on the height of our score. This means that it is important to take careful consideration over credit we use and manage it well.
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You need to put in a good amount of effort to earn a good credit score, you need to pay bills on time and prove your reliability by borrowing some smaller amounts before you can consider a larger amount for home projects or buying a home. It can seem like a lot of effort to borrow the money you sometimes need, however, you should take responsibility to build your score.
Have a look below at some of the key reasons why you should look after your score:
It Determines Whether You’ll Be Eligible For A Loan
Your credit score has a massive impact on what you can borrow and if you actually can. Chances are that you will need to borrow money at some point, for a mortgage to purchase a home, or a loan so you can complete a home renovation. You may also need a credit card so you can have something there for emergencies.
If you want to be approved for a credit card or loan of any kind then you will need a good credit score. If you have a low score it can be nearly impossible for you to obtain things such as a mortgage or they’ll be extremely limited. At the same time, you shouldn’t borrow, just because you can, you need to understand the impact of a secured loan on your lending profile.
If you have big goals then you want to make sure you can get the financing to help you, you don’t want to be in the situation where you can’t get credit because of your history and score being low. If you build your score and show a good history of payments then you will have a wider choice of lenders who are willing to lend to you.
You Can Get A Lower Interest Rate
Having a higher score can lead to you being offered lower interest rates. Your credit score not only determines your eligibility it also has an impact on the interest rate you’re offered, Often having a bad credit score means that you will be offered some scarily high rates of interest. Which may seem a little unfair but it’s because you haven’t proven yourself to be able to manage money. The different being a good score and bad one can be substantial.
It Can Affect Your Business
Even if you don’t plan on borrowing any money, your credit score still matters. Lenders aren’t the only ones who check your score. If your a business or self employeed you will find that businesses will check your score before conducting business with you. They want to know that you’re responsible enough to work with.
You will also find that people such as landlord and letting agencies will use your score to determine if you can afford to pay and on time. It can make it more difficult to rent a property and you will often find that you have to pay a larger deposit and possible even rent in advance. Getting a mobile phone contract, broadband or television services can also be difficult. It can be difficult to get utility suppliers to offer you a connection on direct debit if you have a low score which often leaves you to need to live in a property with a prepayment meter. General things such as insurance can also cause a problem, it leads to fewer options and higher prices.
If that wasn’t bad enough, some employers will perform a check and this means that your employment opportunities are affected by your score.
It’s clear that your score matters, it can affect your home life and even career opportunities, this makes it important to monitor it and keep it high. Make sure you always make payments on time and at least cover the minimum payment. Do you have any other advice that you can offer in the comments section?