It is likely that, like most people, you haven’t given much thought to your credit score unless you have needed to borrow money or apply for some kind of funding. In everyday life, your credit score is probably not something that has really entered your head, and it certainly won’t be something that worries you greatly.
However, it is an important element of your life, and, even if you don’t need to borrow any money, your credit score is something that you should take a good look at as, when you do need it, you won’t want to find any nasty surprises. Here are just some of the reasons why having a good credit score is important.
Getting A Job
Although prospective employers running credit checks on job applicants is still a rarity, it is becoming more popular, particularly if the job involves handling money or dealing in finances in any way – employers want to know they can trust the person they are hiring.
If your credit is bad, it won’t always mean that you can’t get a job, but it could cause problems in some instances. Therefore, it’s always a good idea to check your credit score when you are applying for a new job. There might be problems with it that you didn’t realize, and you might even want to dispute some of the issues with Equifax. Getting these issues cleared up before you need to apply for a new position is the best course of action. Plus, if you know there is a problem, and you don’t dispute it, you can set about getting things right again in your finances.
Finding Somewhere To Live
When you apply for a mortgage, your credit score is definitely going to be checked. The mortgage provider will want to know that you can repay the money they are going to lend you to purchase the property. If your credit score is poor, they may think twice about lending or, if they do, they might add a high-interest rate to the deal to ensure they are covered. This can make things difficult if you want to purchase a property, no matter what your income is.
The same is true when you want to rent a property as well. Again, a conscientious landlord will want the checks to be carried out so that they feel confident that they will receive their rent each month.
If you have a poor credit score then what you earn isn’t going to be of high importance, even if you earn a good salary. How much money you have is less important than your ability to pay it back, and this is what lenders and landlords will be most interested in.
Buying A Car
Unless you purchase a car outright, you will need to put at least some of the cost on finance. This is the same as taking out a loan, as the finance company will pay the car dealership the money you owe, and you then repay the finance company. The process is meant to make it easier for people to purchase vehicles, but if you have poor credit the likelihood is that you will be turned down.
This can be a big problem if you need a car for work, for example. If you can’t get credit due to a poor credit score, you might have to settle for an older car, or one that needs work doing to it, and in the end, you could easily spend more on repairs than the car is worth. Having a good credit score means you have all the choice you could want when it comes to what you want to buy.
Emergency Funding
No matter how careful we are, accidents happen and problems occur in life, and that can sometimes mean that we need emergency funding to see us through the difficult time. If your credit score is low, that funding might not be available – getting a loan or credit card could be impossible. Or the interest rate attached to the borrowing might make it a bad deal.
Although we hope to never have to use emergency funds, it’s good to know they are there if we did need them, and having a good credit score means that there shouldn’t be any difficulties in obtaining the money that is required.
Remember though, that as with any kind of borrowing, it is vital that you will be able to pay the money back when you need to. If not, you could find that you are in a worse financial position and your credit score is negatively affected.