With nearly 30% of Americans suffering from terrible credit, it’s hard for many people to get out of the credit hole that they’ve gotten themselves into.
However, once you have bad credit, the other financial elements of your life become a struggle. You quickly learn why your credit score is important when trying to get a car or buy a home.
Here are 4 reasons why your credit score is so important.
1. Renting an Apartment Is Easier
If you’re looking for a new home or an apartment, having a good credit score can make a huge difference. Your credit score is basically shorthand for how good you are with money. If you’re not good with money, it could say to landlords that you’ll have a hard time covering rent in a bind.
A credit score is also linked to lots of other financial interests. It’s more or less an extrapolation, but people will think about your credit score as indicating your reliability. While it might seem arbitrary, if you know how to calculate your credit score, you can see if you’ll be passed over for an apartment.
2. Good Credit Begets Good Credit
The best way to get better credit is to have good credit. Aim for better credit if you want to pay less on your credit cards.
If you steadily and dutifully pay off your credit cards, credit card companies will start knocking at your door. They’ll see a good, loyal, dependable customer, and want to win you over with a competitive rate.
You’ll find that you’ll be eligible for even better cards that provide more benefits.
3. Some Employers Even Check
Believe it or not, some employers have started checking to see what kind of credit prospective employees have. This could be for the sake of reliability, to see if they’ll have any outstanding debts that could harm their work, or if they’re a known swindler.
If you don’t want your employer to know about your damaged credit score, you’re better off fixing it ASAP. While it’s a shame it would be detrimental to you getting the job you deserve, it’s entirely possible that your boss could know your credit score.
4. Build Better Habits
Your credit score could inspire you to exercise better judgment when spending your money. While it’s a little frustrating to deal with a negative credit score, fixing it could have some extremely positive results.
By fixing your credit score and getting yourself out of debt, you might have improved your spending habits. You might end up being able to save more money than you ever thought possible before.
Why Is Your Credit Score Important?
Understanding why is your credit score important is connected to what kind of financial future you want to have. If you want to be able to own your own home but don’t have the cash to pay for it on hand, your credit score will come into play. You could live in the shadow of your credit score for years if you don’t take it seriously.
If you’re worried you might be going into business with someone with bad credit, check out our guide for what you need to do.